Research from Water Tower Research, Water Tower Research

Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

Equity Research Firm

Thematic (Sector/Industry)

United states Energy / Thematic (Sector/Industry)

<ul><li>The Energy Select Sector SPDR Fund (XLE) has underperformed the S&amp;P500 and Russell 2000 indices during 2024 (Fig 1).</li><li>The S&amp;P 500 has gained ~18%, outpacing the ~8% rise in the XLE and the ~6% rise in the Russell 2000.</li><li>The XLE’s 1H24 performance likely reflects oil prices trading in the $75 - $80/bbl band for much of the first six months of 2024 and natural gas prices which were negatively impacted by mild winter weather. </li></ul>

The Energy Select Sector SPDR Fund (XLE) has underperformed the S&amp;P500 and Russell 2000 indices during 2024 (Fig 1).The S&amp;P 500 has gained ~18%, outpacing the ~8% rise in the XLE and the ~6% rise in the Russell 2000.The XLE’s 1H24 performance likely reflects oil prices trading in the $75 - $80/bbl band for much of the first six months of 2024 and natural gas prices which were negatively impacted by mild winter weather. 

US Oil & Gas - Seeking a Balance Between Growth and Capital Returns to Shareholders