Oil prices are rallying, and the global glut of oil from 2014-2016 is finally wearing down. That means investment opportunities.
Brent crude, the international benchmark, has exploded to over $79 a barrel for the first time in four years. But according to Bank of America, this is just the beginning. The firm sees prices soaring to $90 in the first half of 2019. However the firm adds that this figure could go as high as $100.
“Looking into the next 18 months, we expect global oil supply and demand balances to tighten driven by the ongoing collapse in Venezuelan output. In addition, there are downside risks to Iranian crude oil exports. Plus we see a high likelihood of OPEC working with Russia in 2019 to set a floor on oil prices.”
And now Morgan Stanley has chimed in with its own report. The report claims that a shipping revolution will push oil to $90 by 2020. Morgan Stanley’s global oil strategist Martijn Rats explains:
“Over the next few years, we expect tightness in one particular product — middle distillate — to lead to strength in one particular liquid, crude oil, and especially those crudes that look like Brent.”
So which stocks look set to benefit from this golden era? Here we use TipRanks’ stock screenerto pinpoint five top energy stocks with big exposure to rising oil prices. All these stocks share a very bullish ‘Strong Buy’ analyst consensus rating. This is based only on ratings from the last three months.
Top Penny Stocks To Buy Right Now: Tucows Inc.(TCX)
For a company to truly hold 100-plus bagger potential, it needs to meet a few important criteria:
- Must be a small-cap company today (under $1 billion market cap).
- Attempting to service a massive market opportunity.
- Rock-solid financial statements.
- Talented leadership with skin in the game.
One company that easily passes this test is Tucows.
Tucows operates three main businesses. First, it is one of the biggest providers of internet-domain registration services in the world. Second, it operates Ting mobile, which is a discount mobile-phone service in the U.S. Finally, it is rolling out a home fiber internet business.
With a market cap of just $600 million today, Tucows is certainly small enough to become a 100-plus bagger some day. Even if that happens, it would still just be a fraction of the size of telecom giants like Verizon Communications or AT&T.
As for growth potential, Tucows’ Ting mobile currently services about 200,000 customers in the U.S. That’s barely a rounding error when compared to the 224 million smartphones users that are active in the U.S. today (to say nothing of the tablet market). Meanwhile, Ting Internet is literally only available in three small U.S. cities. Needless to say, there’s a massive amount of room left for future growth.
As for financial strength, Tucows internet-domain registration business is a slow-growing cash cow that kicks off profits that are being reinvested into the growth of Ting mobile and Ting fiber. Even with those heavy investments, the company continues to throw off enough free cash flow to buy back stock and pay down debt.
Finally, Tucows has grown like a weed over the last 20 years under the skillful guidance of CEO Elliott Noss. Long-term shareholders have benefited hugely from his leadership, and he owns about 7% of the entire business. That aligns his incentives perfectly with shareholders.
While it is far from certain that Tucows will ever produce the kind of gains that Netflix shareholders have enjoyed, I wouldn’t rule it out, either.
Top Penny Stocks To Buy Right Now: Roku, Inc.(ROKU)
Shares of streaming device maker Roku had been surging recently as it put together a string of positive press releases, not least of which was the announcement its Roku Channel would soon be appearing on Samsung smart TVs.
That all seemed to get dashed when Amazon.com and Best Buy announced an expanded partnership that would see the e-commerce giant’s new Fire TV Edition smart TVs appear exclusively in the electronics retailer’s stores. And with Best Buy becoming a third-party merchant on the Amazon site, it would be a closed loop where such TV sales would all go through the bricks-and-mortar retailer.
Shares of Roku tumbled on the news, despite the fact that Roku’s own enabled TVs would still be sold at Best Buy. The market assumed that with Amazon entering the TV space with the last remaining electronics superstore, Roku would be squeezed out. But by being exclusive to Best Buy, it gives Roku unfettered competition in all other retail outlets.
That’s not necessarily the case and it looks like an overreaction that depressed the already beaten down media company. That gives investors an opportunity to profit on what is otherwise a growth stock that should be able to emulate Shopify’s returns in the future.
Roku has said its game plan is not to be selling devices, but rather to grow the number of users and build up the amount of content they stream.
At the end of the fourth quarter, Roku had 19.3 million active user accounts who streamed 4.3 billion hours of content in the quarter, a better than 15% increase from the end of the third quarter and 44% jump from a year ago. Hours of video streamed has risen 55% over the past year. Now that it is expanding beyond its own controlled ecosystem with the Samsung deal, other partners may also sign on and those figures could increase exponentially.
Roku’s stock may be down for the moment, but with no guarantees that Amazon will actually succeed and the significant installed base the streaming device maker already has, it may not be long before Roku’s stock starts heading higher.
Top Penny Stocks To Buy Right Now: BankFinancial Corporation(BFIN)
BidaskClub upgraded shares of BankFinancial (NASDAQ:BFIN) from a hold rating to a buy rating in a research report sent to investors on Thursday morning.
Several other analysts have also recently issued reports on the stock. Zacks Investment Research raised shares of BankFinancial from a hold rating to a buy rating and set a $19.00 price target on the stock in a report on Tuesday, May 8th. ValuEngineraised shares of BankFinancial from a hold rating to a buy rating in a report on Thursday, March 1st. One research analyst has rated the stock with a hold rating and four have given a buy rating to the company. The stock has an average rating of Buy and a consensus target price of $17.58.