09 Oct Times like these show why investors need energy stocks
Oakmark Funds’ Bill Nygren thinks energy stocks deserve a place in the portfolio, especially when the market experiences heightened volatility like right now. The S & P 500 energy sector jumped more than 3% Monday to be the best-performing grouping by far, driven by rising oil prices as investors assessed the effects from the deadly Israel-Hamas conflict. “It highlights the value in a portfolio of energy exposure,” Nygren said on CNBC’s ” Squawk on the Street. ” “We’ve kind of forgotten that energy oftentimes moves the opposite direction of almost everything else in the portfolio.” Nygren is one of the top value-focused fund managers with a long-term track record of success. He has managed the Oakmark Select Fund since 1996 and the Oakmark Fund since 2000. The Select Fund, with more than $5 billion in assets, is up almost 23% this year, ranking in the top 1% percentile in its category, according to Morningstar. The fund has also racked up a 11.6% average annual return in the past 15 years. The investor said energy stocks are relatively inexpensive and they are well-positioned for more gains ahead as oil prices are expected to stay elevated. “They’re cheap stocks on their own merits, single digit P/E ratios,” Nygren said. “We think they’re strong arguments for why oil prices should stay in the $70 to $90 range, which is a very healthy outcome for these companies.” Oil prices jumped Monday following the latest Middle East violence, with West Texas Intermediate crude oil futures climbing 3.7%, trading above $85 a barrel. Nygren revealed he recently bought Phillips 66 . His Select Fund also held ConocoPhillips .