Ken Fisher: Buy Into Fossil Fuels

Sep 08, 2009

Energy-hungry consumers around the globe will be demanding fossil fuels. So be overweight in energy stocks--at least 12% of your equity.

I've recommended one energy stock in each of the last three months. But among U.S. firms producing petroleum and natural gas, four stand out: Apache ( APA - news - people ) (APA, 85), Chevron ( CVX - news - people ) (CVX, 70), Hess ( HES - news - people ) (HES, 51) and Marathon Oil ( MRO - news - people ) (MRO, 31). I like Apache's growth potential overseas and in natural gas, Chevron's mass and class, Hess' portfolio and projects, and Marathon's over-the-top cheapness. These are all high-quality firms with balance sheets and cash flows (in the sense of net income plus depreciation) quite able to withstand the volatility in energy prices.

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