Investors in oil stocks such as Seadrill (NYSE: SDRL), Hi-Crush Partners (NYSE: HCLP), Emerge Energy Services (NYSE: EMES), Breitburn Energy Partners (NASDAQ: BBEP), and Linn Energy (NASDAQ: LINE) have been brutalized over the last six months as oil prices have crashed to their lowest levels since the financial crisis. Legendary oil billionaire and chair of the energy hedge fund BP Capital Management, T. Boone Pickens, recently told CNBC's Jim Cramer that he expects oil to return to $100 a barrel within the next 12-18 months.
The 50-year veteran of the oil industry stated that his prediction was largely based on OPEC being forced to cut production later this year, possibly at its June 5 meeting. Right now, shares of Seadrill, Breitburn Energy Partners, and Linn Energy are trading at just 52%, 41%, and 76% of tangible book value, respectively, which is the liquidation value of all their assets minus liabilities. In other words, these investments give you a chance to buy high-quality assets for as little as $0.41 on the dollar.
Source: Motley Fool
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