ICON Energy Fund manager J.C. Waller appeared on CNBC this morning and offered his opinion on energy stocks.
Currently, Mr. Waller believes energy stocks in general are trading at 16% below what he considers fair value, and thus his view is that there is "room to rally".
Drilling down (so to speak..) he believes that the most promising sector of energy is oil and gas drilling, which he believes is trading 36% below fair value. He noted that this sector has also shown recent price strength, particularly over the past six weeks. Thus, based on this combination of value and strength, he believes oil and gas drilling to be a "good place for an active bet".
He highlighted three names in oil and gas drilling which he feels are not being recognized as bargains:
DO - believes it to be 38% under fair value
NBR - he has a fair value target of $97