"Wait For the ‘Second Low’ Before Buying Energy Stocks" (XLE; XOP)

After touting the hydrocarbon equities for the last six months, Barron's may have caught on to the fact that the decline in prices is a sea-change and that listening to some hipster analyst, whose long-term frame of reference maybe goes back to 2009 and who may not have the intellectual chops to figure it out, might prove dangerous to their readers.
XLE $80.34; XOP $51.69; WTI $49.17.
Good on Ben Levisohn for posting this, the first cautionary piece I can remember.

From Barron's:

Should investors be betting in a bottom on energy-sector stocks like ExxonMobil (XOM), Chevron (CVX) and ConocoPhillips (COP)? Not if some recent observations are correct.
Sure, oil seems to have bottomed. But Evercore ISI’s Ed Hyman notes that energy stocks usually lag the recovery in oil prices. He explains:

In the Past, Shares of Oil Companies Have Tended to Lag the Lows In Oil - The six previous V-shaped bottoms in oil started out U-shaped and double-bottomed. The bottoms took roughly two months to form. In every case, shares of oil companies bottomed coincident with or after the second low in oil. That is, you could have waited to see the second low in oil before buying the shares.

Cumberland’s David Kotok explains why he remains underweight Energy in client portfolios:

We are underweight the Energy sector in the US stock markets and the rest of the world. We hold this underweight position because we are not convinced that a bottom has occurred in the oil price. In the scenarios that we envision, we see more downside risk to the price than upside potential. That said, there are some scenarios with a strong upside, but they are event-driven, and the events are not predictable as to time or magnitude.....

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