Oil well pump jacks at Almond Orchard above the Monterey Shale in the San Joaquin Valley.
Citizens of the Planet | Getty Images
Energy is the top performing S&P 500 sector for 2021 as investors bet that a return to normal will fuel the group, and Goldman Sachs anticipates these stocks will continue to outperform. However, after the sector rose 40% this year, the company found that future investors should be selective rather than buying the entire sector.
“We believe that if trading is reopened, leverage will no longer sustain outperformance as much of it is now reflected in valuations,” the company said in a statement to clients on Friday. Analysts led by Neil Mehta looked for stocks with “company-specific drivers and catalysts that can deliver value regardless of the crude oil prospect”.
The company compiled a list of eight “idiosyncratic” ideas in the industry. Here are some of the names, all of which are rated by the company upon purchase: