According to David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates, there is no urgency to buy energy stocks right now just because prices in oil have declined.
"...But at some point this year, it's going to be a very attractive opportunity," Rosenberg said.
"My sense that, sometime in the second quarter, if I had to time it, we may find valuations improve more dramatically and provide a more compelling picture in terms of dipping some toes in the energy space."
Insiders, on the other hand, are not waiting to buy shares in the energy sector. Energy stocks, like Global Partners LP (GLP, Financial) and Eclipse Resources Corp (ECR, Financial) recently had an increase in insider buys.
As shown in the chart above, the last time insider buys spiked in the Energy Select Sector SPDR (XLE, Financial) was in 2009, when prices plunged. We are seeing the same trend now as the prices continue to decline and insider buys spike.
Oil prices dropped 50% in 2014 and continue to drop this year. Analysts expect prices will continue to drop due to increased oil exports out of the US and record production levels from Iraq and Russia.
The current price of XLE is $74.23.
"Oil prices will continue to fall in the short term and remain weak through 2015 until the supply glut in the market is corrected," Marina Petroleka, chief oil and gas analyst at Business Monitor International, said.
Rosenberg predicts prices will fall to $40 and then go back up to $50-70 by next year.
Global Partners LP (GLP, Financial), at $35.66, is a distributor of gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers in the northeastern area of the United States.
Last month, General Partners Global GP LLC, bought a total of 318,552 shares of the company's stock.
The company recently accounced it has now acquired independent petroleum marketer Warren Equities, Inc. from the Warren Alerp Foundation, including 147 company-operated Xtra Mart convenience stores and related fuel operations at $387 million.
Guru Jim Simons (Trades, Portfolio) currently owns 12,500 shares of this stock.
Eclipse Resources Corp (ECR, Financial) is a fairly new company, formed in February 2014 that acquires and develops of oil and natural gas properties in one specific area of the United States — the Appalachin Basin.
On Dec. 27, President and CEO Benjamin Ward Hulburt bought 55,151 shares; both EVP & COO Thomas Liberatore and EVP and Secretary & General Counsel Christopher Kent Hulburt purchased 13,788 shares and 10% Owner EnCap Energy Capital Fund VII bought 44,662,273 shares.
According to a press release on December 29, the company entered an agreement to sell 62,500,000 shares of common stock in a private placement transaction for a total of $440 million.
Eclipse also announced the approval of a capital budget from the Board of Directors for 2015 of $640 million, 20% less than the previous year's capital budget. The company expects to deliver a year-over-year production growth between 240-290% in 2015 due to improvements in capital and drilling efficiencies.
Gurus that currently hold this stock include: Leon Cooperman (Trades, Portfolio) with 300,000 shares, Louis Moore Bacon (Trades, Portfolio) with 141,400 shares and Steven Cohen (Trades, Portfolio) with 5,500 shares.
Learn more about Insider Trends by using the Insider Trades feature, for Premium Members. Not a Premium Member of GuruFocus? Try it free for 7 days.
