If you’ve watched stocks this year, you know that the broader market hasn’t seen a sustained uptrend in months.
But the second-biggest storyline is this: Oil and gas stocks are on fire!
Now, remember, just because the oil sector is blowing the doors off … it doesn’t mean all stocks in that sector are worth your investment.
Our proprietary Stock Power Ratings system will show you there are some great stocks primed to boost your portfolio.
On the other hand, there are those that will only drag your portfolio down — even in the red-hot oil and gas sector.
One such stock is Equitrans Midstream Corp. (NYSE: ETRN).
ETRN is a $2.9 billion natural gas company — one of the largest in the U.S.
Let’s dive deeper to find out why this stock is one you shouldn’t touch.
The company has a huge natural gas play in the Appalachian Basin — a 185,500 square-mile area rich with oil and gas deposits.
Equitrans Midstream stock scores a “High-Risk” 6 out of 100 on our Stock Power Ratings system. We expect it to underperform the broader market in the next 12 months.
Equitrans Stock: Low Growth & Weak Value
I usually reserve this space to share some great financial news about the company.
That’s not the case for ETRN:
- The company reported a net loss of $503.6 million in the third quarter of 2022.
- Management expects the company to suffer between $250 million and $270 million in net losses for the entire year.
You can see why Equitrans stock earns a 6 on growth, spurred by its lackluster revenue.
It scores a 13 on value thanks to its negative price-to-earnings ratio and negative earnings per share.
This means the company isn’t making any money.
ETRN’s returns on assets, equity and investment are all in the red. Management struggles to find ways to make a profit … earning the stock a 21 on our quality factor.
ETRN dropped 30% over the last 12 months. That includes a 30.2% drop from its previous high in September 2022.
Meanwhile, its midstream energy peers are up 24.5% over the last year.
ETRN scores a 6 overall on our proprietary Stock Power Ratings system.
That means we consider the stock “High-Risk” and expect it to underperform the broader market over the next 12 months.
There is no doubt that oil and gas stocks blew away the rest of the market in 2022.
It’s a trend we believe is going to continue in the months ahead.
But looking at our Stock Power Ratings system will tell you there are some oil and gas stocks … like ETRN … that aren’t joining this massive energy bull market.
Note: You need to sign up for my colleague Adam O’Dell’s upcoming presentation.
Later today, he will reveal details on his top stock for the developing oil super bull market. He’s confident it will soar 100% higher in only 100 days when things kick off.
Click here to put your name on the guest list for his “Oil Super Bull Summit” that’s happening at 4:30 p.m. Eastern today.
Stay Tuned: Oil’s Next Bull Market
Remember: We publish Stock Power Daily five days a week to give you access to the top companies that our proprietary Stock Power Ratings identify!
Tomorrow, we’re doing something a little different.
Adam is going to show you why oil’s next bull market is already here, and what’s coming next for oil in 2023 and beyond.
Matt Clark, CMSA®
Research Analyst, Money & Markets