American Depositary Receipts (ADRs) of
PetroChina Co Ltd.
) scaled a new 52-week high of $129.86 during its trading session
on Jul 14, 2014. In fact, the Chinese energy giant has seen its ADR
price climb some 20.3% since the beginning of the year.
Why the Bullishness?
The impressive economic growth in China has significantly increased
the demand for oil and chemicals. Being the largest integrated
Chinese oil company, PetroChina is well positioned to capitalize on
the country's favorable trends.
Another lucrative growth area for PetroChina is its natural gas
business, which is likely to see a boom in the coming years as
China moves from coal to natural gas. At present, two-thirds of
China's electricity is generated by coal-fired power plants, which
emit polluting greenhouse gases.
Moreover, strong growth in China's middle class and in automobile
ownership is expected to fuel consumption of refined petroleum
products. Though PetroChina's downstream operations are primarily
located in China's relatively poor Northern regions, this would be
an advantage in the long run.
Zacks Rank & Stock Picks
With PetroChina ADRs trading at a 52-week high, any upside from
here may be limited. The company's Zacks Rank #3 (Hold) - implying
in line performance with the broader U.S. market over the next one
to three months - also does not reflect an upside potential.
Meanwhile, one can look at better-ranked players in the energy
Magellan Midstream Partners LP
EXCO Resources Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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PETROCHINA ADR (PTR): Free Stock Analysis
CONOCOPHILLIPS (COP): Free Stock Analysis
MAGELLAN MDSTRM (MMP): Free Stock Analysis
EXCO RESOURCES (XCO): Free Stock Analysis
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