Bargains in the Energy Patch

The market started the trading week Monday with 300-point intraday reversal spurred by the dysfunctional election results in Italy, which is the third-largest economy in Europe as well as the third-largest debtor nation in the world. The U.S. stock market suffered its largest decline since right after our election in November. I believe this is more confirmation that the market is in a fragile state. I continue to expect an overall 5% to 8% pullback in the markets, but not a major correction. In Monday's column, I outlined three blue-chip positions I plan to add to if that projected selloff indeed comes to fruition.

Today, let's look at a couple of smaller firms I own in the oil & gas sector that I will also add to if equities continue to decline. The sector is one of the few unequivocal success stories of the past five years on the back of an impressive and continuing domestic energy production boom. This expansion is still in its early innings, so there is a lot growth in front of the individual companies in the industry. Here are a couple of picks from the fast-growing energy patch that should continue to expand regardless what the overall market does. Both are cheap compared to their growth prospects and I could see either one eventually being an acquisition target if M&A activity remains robust....244 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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