Performance gap in energy means it's time to buy stocks: Portfolio manager
A Canadian portfolio manager is telling investors they should take their money out of unprofitable cannabis companies and invest in energy stocks instead.
“People who are sitting in marijuana stocks right now with negative earnings, I think would be wise to take some of that money off the table and putting in [energy] if they want the same risk profile or better,” Ryan Bushell, president of Newhaven Asset Management, told BNN Bloomberg in an interview Thursday.
Investors have “left the sector for dead,” Bushell noted, even though both Canadian oil prices and West Texas Intermediate, the North American benchmark, have seen a dramatic rally this year.
Western Canada Select has surged almost 90 per cent in 2019 in the wake of mandatory production cuts imposed by the Alberta government, which began late last year. Meanwhile, WTI has marched more than 40 per cent higher.
Still, investors are steering clear of the sector after experiencing oil price volatility in the past.
“The sentiment has been very, very poor,” Bushell said.
Bushell expects investors to come back into the sector, depending on what happens with a number of key events. He said the expiration of Iran sanction waivers at the end of this month and OPEC’s June meeting in Vienna could serve as positive catalysts that prop up second-quarter reports from Canadian energy companies, triggering a positive share price reaction.