Power Rankings: Energy ETFs Dominate the Start of 2025 The top-performing sector of 2025 may be a bit of a surprise. Energy has the energy right now, as the sector has jumped 7.65% to start the year. (That’s more than 500% annualized!) That outperforms all of 2024 when the sector edged up 5.7%. And that followed a down year in 2023, when it slipped 1.3%. A few factors converged to bring in the buyers. Cold weather has bumped up demand for oil and natural gas at a time when oil investors are lower than expected. U.S. sanctions have affected Russia’s output, also boosting prices. My Quantum Edge system ranks the sectors, and as you would expect, Energy has been at the top of the list since December 19, which is right when the sector began to rally. This isn’t just Joe Investor buying either. Big Money has been at work, as you can see by the rising number of green bars – which indicate unusual buying indicative of institutions – and the Energy Select Sector SPDR ETF (XLE) that tracks the sector. 
Source: MAPsignals.com Energy ETFs absolutely dominate this month’s power rankings. In fact, they constitute 13 of the 15 highest-rated ETFS. Here are the Top 5 ETFs, their Quantum Scores, and their top holdings. Then we’ll zoom in on some of the top stocks. Note: If you consider investing in any of these ETFs, please check liquidity. Top 5 ETFs #1 Global X MLP & Entergy Infrastructure ETF (MLPX) - Quantum Score: 72.2
- Last 3 months: +14.6%
- Top 5 holdings: Enbridge (ENB), Williams Companies (WMB), ONEOK (OKE), Kinder Morgan (KMI), Cheniere Energy (LNG)
#2 Alerian MLP ETF (AMLP) - Quantum Score: 70.4
- Last 3 months: +8.3%
- Top 5 holdings: Plains All American Pipeline (PAA), Energy Transfer (ET), Western Midstream Partners (WES), MPLX LP (MPLX), Enterprise Products Partners (EPD)
#3 First Trust Natural Gas ETF (FCG) - Quantum Score: 72.2
- Last 3 months: +12.2%
- Top 5 holdings: Hess Midstream LP (HESM), Occidental Petroleum (OXY), Western Midstream Partners (WES), EQT Corp. (EQT), ConocoPhillips (COP)
#4 Invesco Dorsey Wright Energy Momentum ETF (PXI) - Quantum Score: 67.8
- Last 3 months: +7.8%
- Top 5 holdings: Texas Pacific Land Corp. (TPL), Targa Resources (TRGP), Williams Companies (WMB), Archrock (AROC), Weatherford International (WFRD)
#5 First Trust Nasdaq Oil & Gas ETF (FTXN) - Quantum Score: 67.5
- Last 3 months: 5.8%
- Top 5 holdings: Chevron (CVX), Exxon Mobil (XOM), ConocoPhillips (COP), EOG Resources (EOG), Kinder Morgan (KMI)
| Recommended Link | | | | In May 2024, Legendary Wall Street money manager Louis Navellier predicted that Trump would win and trigger a massive boom. He was right! Just in the first week after Trump’s win, many stocks jumped by double and even triple digits. But now he’s issuing this NEW warning about Trump’s inauguration. |  | | Top Stocks in the Top ETFs I recommend the top-ranked energy stock in my system to my Quantum Edge Pro readers, so I can’t share that here. Actually, we have two of the top five at the moment. But in looking through those top holdings in those top-ranked ETFs, the highest-rated stock is Archrock (AROC), which designs, owns, and operates its own fleet of natural gas compression equipment. It currently sits in the buy zone with a strong 82.8 Quantum Score. 
Source: TradeSmith Finance I can see in my system that Big Money has been active in this stock the last two months, and shares have surged nearly 40% the last three months. That process an elevated Technical Score of 91.2, which usually signals shares are overheated. When that score pops over 90, a pullback is increasingly likely. In addition to AROC ranking the highest, we see three stocks that appear in two of the top-ranked ETFs: Williams Companies (WMB), Western Midstream Partners (WES), and ConocoPhillips (COP). The highest-ranked of those three is WMB, which operates natural gas pipelines and storage facilities, as well as producing natural gas and oil. That Quantum Score of 75.9 is in our buy zone, but I would highlight one caution. 
Source: TradeSmith Finance Notice the divergence between the fundamentals and the technicals. The technical are borderline overheated at 88.2, while the fundamentals are not horrible, but they’re not great either at 58.3. Sales growth can be spotty in energy companies, as can high debt. Western Midstream Partners (WES), another natural gas and oil company, scores 74.1 and looks similar to Williams with a somewhat high Technical Score (85.3) and a so-so Fundamental Score (58.3). It, too, is affected by choppy sales and earnings trends along with high debt. ConocoPhillips (COP) is much the reverse. It is just below our buy zone with a 62.1 Quantum Score, but it has the best fundamentals of the group (70.9) and the lowest technical (55.9). It has much lower debt and a little bit more consistent sales and earnings trends. Of the three, I might be tempted to keep an eye on COP and see if improving technicals lift the overall Quantum Score into the buy zone. The stronger fundamentals strengthen the likelihood for higher prices in the future. Energy stocks can sometimes require a more nuanced analysis because of sometimes lumpy quarterly results. That’s why the ones I recommend in Quantum Edge Pro have stronger earnings and sales growth and very little debt to be concerned about. Quantum Edge Pro members have full access to the scores for all the stocks in my system – the Quantum Score, Fundamental Score, and Technical Score. Click here to learn more if you’d like to put that power to work for yourself. It’s good to see energy in energy stocks. Just be sure to stay focused on both the fundamentals and technical, as well as Big Money inflows. That’s how you find the gushers in stocks. Talk soon, 
Jason Bodner
Editor, Jason Bodner’s Power Trends | 
No comments:
Post a Comment