value managers are bullish on cheap oil stocks, fund managers with a shorter investment horizon don’t quite share the sentiment. Donald Rogan, the head of stockbroking at Nedbank Private Wealth, told reporters that his portfolios are currently underweighted in resources, including oil. The bank expects the oil price to stabilise at $65 (R771)within a one-year period, while it expects the commodity to reach $80 (R949) within the next two to three years.
“Given where we see the oil price going, I think there’s still a lot of uncertainty in the market. We do still think it’s a bit early to get into commodities.”
Tom de Lange, chief investment officer at Emperor Asset Management, cautions against the opportunity cost of such a value approach. “From a momentum perspective, it’s not a good time to buy that kind of stock. It could take up to two years before the share price gains enough momentum to outperform the market on a monthly or quarterly basis.”