Investment guru Leon Cooperman is betting on energy names since he believes a turnaround in oil prices is coming.
“The best cure for low oil prices is low oil prices,” the Omega Family Office chairman and CEO said Friday on CNBC.
“At these prices, a lot of companies will go out of business and the supply demand will tighten up,” said the billionaire investor.
“A lot of these stocks are selling at a fraction of underlying asset value,” Cooperman said
He cited WPX Energy and Parsley Energy as two names that he owns.
When it comes to the broader market, Cooperman said he’s optimistic that stocks have bottomed.
“If I’m right on the virus call, if I’m right, and that’s the big if ... I think the market at the recent low ... was close enough to the bottom to be called the bottom,” he said.
Doubts about the fate of the U.S. economy in the face of the coronavirus hammered Wall Street again on Friday, halting its best three-day bounce in almost a century as the number of cases across the country skyrocketed, Reuters explained.
The United States surpassed China as the nation with the most number of COVID-19 cases, putting more pressure on lawmakers to flood the country with cash to support businesses and families.
"We have still not fully understood the degree of the economic impact," said Massud Ghaussy, senior analyst at Nasdaq IR Intelligence in New York.
"Currently, from a policymaker's perspective, it's a relative balance between managing the spread of the virus and opening the economy."
Oil prices continued their fall on demand concerns as the virus slowed economies to a crawl, which outweighed the stimulus efforts.
Around midday Friday, U.S. crude recently fell 5.44% to $21.37 per barrel and Brent was recently at $24.54, down 6.83% on the day.
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