By Richard Zeits:
The steep, across-the-board declines in the Oil & Gas Sector seen in the past three months must have left many investors in pain and, possibly, confusion. Given the Sector’s tremendous size and high fragmentation, the hundreds of stocks providing exposure to the International Oil industry and the booming North American Oil & Gas shale business are very broadly distributed across individual and institutional investment portfolios.
The Sector’s correction has been particularly pronounced in the small-cap E&P sector where many popular stocks have seen peak-to-current declines in excess of 30%-40% in three-four months’ time. Many investors may be asking themselves legitimate questions, where is the end to this decline and will their positions recover from the recent losses?
It is not difficult to lose the bigger picture of the Sector’s performance and stock price dynamics behind the day-to-day noise (and pain) of stock price volatility. It may be helpful, therefore, to