Energy stocks ‘look extremely attractive,’ says portfolio manager

Energy stocks are the uncontested winners in the S&P 500 this year (^GSPC). They continue to “look extremely attractive,” says one fund manager.

“Commodity prices remain buoyant,” Ben Cook, portfolio manager of Hennessy Transition Fund, told Yahoo Finance. “We foresee growth in crude oil demand this year, as well as growth on natural gas demand on a global basis this year and next.”

“High commodity prices are affording many of the companies in the U.S. upstream sector with tremendous cash flow, and that cash flow is allowing these companies to pay down debt, and obviously repurchase shares,” said Cook.

“We look at the major sector categories in the S&P 500 and energy at this point and time screams attractively, not only a valuation basis but on a free cash flow yield basis,” he said. “The energy stocks to us, from an investor return perspective, look extremely attractive.”

Crude futures are on their third day of gains, coming off an 8 month low. Brent (BZ=F) and West Texas Intermediate…

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This article was written by and originally published on finance.yahoo.com