Oil Stocks Remain a Risky Investment

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The energy patch continues to attract considerable attention from bargain hunters. The prolonged oil slump has savaged energy stocks, causing many one-time darlings to come crashing to Earth and trade at a third or less of their pre-slump value. Even long-time stalwart Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG), which again and again proved it was capable of consistently unlocking value, is now trading at less than a fifth of its 2014 high.

Many pundits believe oil will recover, fueling a belief that beaten-down energy stocks will rally strongly. Recent developments, such as OPEC production cuts, growing inventory draws, and stronger economic growth, are encouraging investors to believe that a recovery is not far away.

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