Most investors are running away from all shale oil stocks now. The price of crude oil plummeted 14% last week, and the prospects for a glut run high.
Even with a 4% bounce today (Monday), crude oil prices are down 33% since June. And price of West Texas Intermediate (WTI) oil could drop from $69 a barrel where it is now to as low as $40, says Money Morning Chief Investment Strategist Keith Fitz-Gerald.
Because shale oil costs more to produce than conventional oil, investors have good reason to worry about the impact of lower crude oil prices on shale oil stocks.
But Fitz-Gerald says selling everything isn't the answer. In fact, according to the seasoned market analyst with 33 years of experience, now is the perfect time to look for long-term winners.
"The key to determining who is going to survive is looking at the capitalization," Fitz-Gerald explained said in an appearance today on the FOX Business' "Varney & Co." program. "Those companies that are weak, that don't have good balance sheets, that have a lot of debt, are clearly going to get weeded out.
"On the other hand, if you're looking at players like Kinder Morgan, who are going to be in the midstream area, they're going to get even stronger. Because they're going to gobble up the [fragile players] in their moment of weakness."
To find out two of Fitz-Gerald's favorite shale oil stocks right now, watch the video below.
Learn How to Protect Your Investments: Most investors have heard of trailing stops, but you can take it a step further. "Ultimate Trailing Stops" can play a big part in helping investors preserve their profits. Here Keith Fitz-Gerald explains what they are and how to use them...
Follow me on Twitter @DavidGZeiler.