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Energy stocks "a good value" despite lower oil: S&P Capital IQ

The drop in oil prices has taken its toll on energy stocks. But one strategist is optimistic on the sector’s prospects.

Crude prices (CLV15.NYM) are approaching $40 per barrel, down from nearly $100 a year ago. Lower oil prices helped to bring down the S&P 500’s energy sector, which is down 17% since the beginning of 2015. Energy (^GSPE) is the worst performer of the 10 major sectors in the S&P 500 (^GSPC).

Throughout the year, analysts lowered their expectations on energy stocks because of oil’s decline. But when second-quarter earnings came out, energy companies soundly beat Wall Street’s expectations. The sector’s earnings were on average 30% higher than analysts’ estimates. Five of the top 10 companies with the largest earnings surprises were in the energy business.

Company

Ticker

Sector

Q2 EPS Estimate

Q2 EPS Actual

% Difference

Electronic Arts

EA

Information Technology

$0.022

$0.15

650%

Hudson City Bancorp

HCBK

Financials

$0.005

$0.07

600%

...

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