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  • SPDR S&P Oil & Gas Equipment & Services ETF (XES) - possible rise by more than 46% due to higher oil production
Max Manturov

Max Manturov

Head of investment research regulated by CySec 15.03.2022

SPDR S&P Oil & Gas Equipment & Services ETF (XES) - possible rise by more than 46% due to higher oil production

The price of oil on the stock exchange has reached an all-time high. Energy prices continue to rise amid sanctions that include a ban on oil and gas imports from Russia. The US has completely rejected imports from Russia, while in Europe a number of countries have prepared for a partial halt in supplies: major Western companies, Shell and BP, have already withdrawn from the Russian market.

OPEC believes that the current historically high oil prices are "unhealthy" for all the market participants. Tougher sanctions could cause the price of black gold to rise further.

Investments in ETFs from the oil services sector are attractive against the backdrop of current events. These include the SPDR S&P Oil & Gas Equipment & Services ETF (XES), iShares U.S. Oil Equipment & Services ETF and VanEck Oil Services ETF.

                                                                                               Read more about iShares U.S. Oil Equipment & Services ETF

                                                                                                            Read more about VanEck Oil Services ETF

Ticker: XES.US
Entry price: $68.3
Target price: $100
Potential Growth: 46.41%
Time horizon: 12 months
Risk: High
Position size: 2%
Current dividend yield: 0.6%

About the ETF fund

The XES ETF tracks a weighted average index of companies that operate in the oil and gas equipment industry.

The ETF fund's major holdings include Patterson-UTI Energy (PTEN.US) at 5.70%, Helmerich & Payne (HP.US) at 5.43%, Nabors Industries (NBR.US) at 4.93%, Halliburton Company (HAL.US) at 4.88% and Valaris (VAL.US) at 4.85%.

Important indicators:

  • Assets under management, AUM - $ 256.08 million
  • Number of ETF share names - 29
  • Expense Ratio - 0.35%
  • PE ratio - 24.57x
  • ETF yield over the last 6 months - 37.69%
  • KID

The increased demand for oil has made the resource profitable. The price of energy is rising due to the sanctions imposed and the continuing conflict in Ukraine.

Many countries, particularly the US, are ready to increase their own production of oil to reduce the cost per barrel.

The SPDR S&P Oil & Gas Equipment & Services ETF (XES), iShares U.S. Oil Equipment & Services ETF and VanEck Oil Services ETF track indices of companies involved in oil production and sales. The whole situation only benefits oil and gas companies, whose demand for services will grow.

How to take advantage of the idea?

  1. Buy ETF at a price of $68.3.
  2. Allocate no more than 2% of your portfolio for purchase. To compile a balanced portfolio, you can use the recommendations of our analysts.
  3. Sell when the price reaches $100.

How to Buy ETFs?

If you don't have an investment account yet, open it now: this can be done online, in just 10 minutes. All you need to do is fill out a short form and verify your account.

After opening an account, you can buy ETFs in either of the following ways:

Freedom24 Web Platform: In the Web Terminal section, type in the search box, and select the appropriate ETF in the results. Open a secure session in the trading window on the right, select the number of securities you want to buy, and click Buy.

Freedom24 iPhone or Android App: Go to the Price screen and tab the search icon in the top right corner. In the search dialog that will show up, type and select the appropriate ETF in the results. You will then see the ETF in the market watch; tap it and go to the Order tab in the dialog that shows up. Specify the number of securities you want to buy and click Buy.

Buy SPDR S&P Oil & Gas Equipment & Services ETF >>

*Additional information is available upon request. Investment in securities and other financial instruments always involves risks of capital loss. The Client should make himself aware at his own accord, including to familiarize himself with Risk Disclosure Notice. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Commissions, fees or other charges can diminish financial returns. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and do not constitute an investment advice service. The recipient of this report must make their own independent decisions regarding any securities or financial instruments mentioned herein. Information has been obtained from sources believed to be reliable by Freedom Finance Europe Ltd or its affiliates and/or subsidiaries (collectively Freedom Finance). Freedom Finance Europe Ltd. do not warrant its completeness or accuracy except with respect to any disclosures relative to the Freedom Finance Europe Ltd. and/or its affiliates and the analyst’s involvement with the issuer that is the subject of the research. All pricing is indicative as of the close of market for the securities discussed, unless otherwise stated.

  • Sources of information

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