Investors might consider putting money to work in a lagging part of the market.
According to Jan van Eck, CEO of VanEck, oil shares are having a hard time.
“The [oil] there is an offer. The companies are perhaps the second best cash flow companies [compared to] the semiconductorshe told CNBC's “ETF Edge” this week. “They're trading at double-digit cash flow yields for E&Ps [exploration and production] and sectors in the oil market. Nobody cares. No one cares.”
His company runs the VanEck Oil Services ETF. FactSet shows as of January 31 that the ETF has the largest interests Schlumberger, Halliburton And Baker Hughes.
The ETF is down nearly 7% so far this year, and down more than 9% over the past 52 weeks. So far this year the S&P500 is up more than 5% so far this year.
“Are [energy] It is underperforming in many other areas, but not really bad, as the driving force behind global growth is now really on the wane and may not be for a few more years,” Van Eck said.
Todd Sohn of Strategas also characterizes oil stocks as unloved and sees potential for a turnaround.
“Last year they had quite a large outflow. And if the technology were to take a hit at some point in this quarter, I think the more tactical people would turn to things like energy or even healthcare” said the company's ETF and technical strategist.
WTI crude oil just posted its best weekly performance since September and made most of its gains for the year this week. The commodity climbed 6% to settle at $76.84 per barrel.