As energy stocks continue to slump and remain out of favor, many stories you’ll read will trumpet the doom and gloom of low share prices for energy companies and their investors. Right now, many energy stocks, particularly small- and mid-cap companies, are priced as though there will be no growth over the next few years.
However, what goes down must come up, and a correction can be an amazing opportunity. With energy company share prices close to correction territory — a significant drop off of 52-week highs — the time to cultivate new investors is here and now.
Energy demand may be down but not dying. While no one can guarantee that all energy companies will recover, the chances of their stock prices staying so low for a prolonged period is highly unlikely. When demand rebounds and supply returns to normal levels, and even starts to grow again, C suites that did not start a dialogue with investors will likely be kicking themselves. They will see their peer companies that cultivated new investors and maintained a dialogue with current investors reap the benefits of the recovery while they will be sitting on the sidelines.
It may seem outrageous to promote shares of anything right now while markets tumble all over the world, but the truth is that corrections only happen every so often. When they do, there’s an opportunity for out-of-favor sectors to improve shareholder value for their investors.
And for investors who want to make money, it only makes sense to buy the correction dips and bear market lows.
Next week, five commandments for energy company C suites