What are we screening for?
North American-listed energy stocks with compelling value-momentum.
The Screen
On Tuesday, the United Arab Emirates announced it would be leaving the Organization of Petroleum Exporting Countries (OPEC) on May 1, marking the latest setback for oil markets and introducing further instability to the Gulf region. In 2025, OPEC members produced roughly 50 per cent of the world’s oil and oil liquids. Prior to the conflict in Iran, the UAE was producing 3.3 million barrels per day (bpd), with total production capacity of approximately five million bpd. As the conflict in Iran continues into its ninth week, the Straight of Hormuz – through which roughly 20 per cent of the world’s oil and gas passes – remains effectively closed. That has been a key reason the UAE and other Gulf producing countries have curtailed oil production by nearly eight million bpd. This supply shock has elevated oil prices and the volatility of many commodities. Brent crude, the global oil benchmark used to price more than 75 per cent of the world’s traded petroleum, recently closed above US$110, a level not seen since the beginning of the Russia-Ukraine war. The World Bank is forecasting an average 16-per-cent increase in commodity prices in 2026, which could provide further momentum for commodity stocks. Today, we screen for North American-listed energy companies demonstrating strong value momentum in a highly volatile market.
- First, we screen for North American-listed oil, gas, and consumable fuels companies with a market capitalization greater than US$1-billion.
- Next, we screen for companies demonstrating strong recent value and momentum characteristics. We use the LSEG Starmine Value Momentum model to screen for companies with a score of 95 or higher, representing the top 5 per cent of companies. The value momentum model is a percentile ranking of stocks based on recent valuation and momentum characteristics such as analysts estimates, historical stock returns, and earnings-per-share growth rates, with 100 representing the highest rank.
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What We Found
The screen, ranked by StarMine Value Momentum Model, produced nine companies.
International Seaways Inc. which scored 98 in the Starmine Value-Momentum rankings, was the only oil and gas storage and transportation company to make the screen. The company operates a fleet of 68 vessels that span crude, refined products, and chemical tankers, which provides a balanced fleet composition across oil products. Global tanker supply has remained tight in recent years with shocks including the global pandemic and numerous geopolitical events. The aging global inventory of tanker fleets will continue to add supply constraints as vessels are retired and not replaced. The time horizon for a new vessel from order to delivery is now approximately three years, nearly double the historical average, which could further add to the short-term supply imbalance. To help mitigate these issues, International Seaways has been modernizing its fleet with improvements which extend the life of vessels. These tanker fundamentals have amplified the impact of supply disruptions, with rates for VLCCs – Very Large Crude Carriers, one of the most common categories of vessel used to transport oil – increasing by upward of 500 per cent since the beginning of 2026.
APA Corp. is an independent energy company with operations in the United States, Egypt, and Britain, and exploration assets located offshore Suriname. The company scored 95 in the Starmine Value-Momentum rankings and is the top-performing stock within the S&P 500 Energy Index, up over 58 per cent year-to-date. APA is scheduled to report first-quarter earnings on May 6 and released a pre-earnings supplement which noted realized prices of $72.50 per barrel (bbl) for U.S oil, and $85.70 for international oil, along with production curtailment of select U.S. gas and natural gas liquids assets. Several analysts who cover APA Corp. expect the company to deliver strong first-quarter results, driven by higher realized oil prices and the performance of core assets in West Texas and Egypt. In 2025, the company met or exceeded production guidance in each quarter on lower-than-planned capital expenditures, demonstrating its operational excellence. Management is focused on improving the company’s balance sheet by reducing long-term debt and returning at least 60 per cent of free cash flow to shareholders through dividends and share buybacks.
Investors are advised to do their own research before trading in any of the securities shown.
Stephen Donovan, CMT, is a Sales Specialist covering commodity markets at LSEG.