Insight & action

Energy Stocks' Earnings Are Full of Surprises

Today we "energize" our portfolio based on data collected from Ned Davis Research. Of the 10 industry groups that comprise the S&P 500 Index, the energy sector posted the highest upside surprise to analyst estimates for the nearly completed first quarter reporting season.

Critically, the energy sector also shines as we look to the full year and beyond. Since both NDR and Bloomberg track consensus estimates for 2014 and 2015, we cross-checked the data to confirm its accuracy. Our observation: Analysts forecast the energy sector will lead all 10 groups in 2014, posting an average gain of 19.7 percent. For 2015, growth slips to 14.5 percent, but still ranks a close second behind materials.

Investors looking to increase their broad exposure to energy can chose among several exchange traded funds (ETFs) including: Energy Select Sector SPDR ETF (XLE); iShares U.S. Energy ETF (IYE); Market Vectors Oil Service (OIH).

For investors who prefer specific companies, we screened the sector for earnings growth of at least 20 percent, and included only those companies with no "sell" ratings.

Ten companies met our criteria:

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.