Are Fracking Stocks the Next Trump Stocks?

With Donald Trump’s sweeping victory and the GOP’s dominant performance in the polls earlier this month, investors are shifting allocations for a Republican-led economy for at least the next two years. Lots of “Trump trades” are soaring: private prison stocks, Bitcoin and Bitcoin stocks, even EV stocks like Tesla. But there are a few the market hasn’t noticed just yet. And they’re fracking stocks.

You see, everyone knows that Trump still wants to “drill, baby, drill” to unlock the U.S. energy industry. But few people realize that after you drill an oil well, in most cases these days, all you have is a dry hole in the ground. You have to take it one step further before the oil starts to flow. And that step is hydraulic fracturing, or fracking.

And once the world catches on to how oil production really works, these fracking stocks could become the next “Trump trades” to see “yuge” market swings…

Fracking Stocks: The Hardware

When you’re talking about fracking stocks, the first place you need to start is with the companies making fracking possible. Here, I’m referring to the companies that supply the necessary equipment for oil companies to release that tight oil.

One of the biggest in the world is SLB (NYSE: SLB). Better known by its former name, Schlumberger Limited, this company excels at helping folks get oil out of difficult locations. That could mean difficult geographic regions, like the North Sea. And it could mean difficult geological formations, like U.S. shale oil fields.

In the world of fracking stocks, SLB is a supplier of the equipment needed to drill the wells and fracture the rock formations. From drill bits like the one below to equipment for sealing the well’s walls, SLB is nearly every fracking company’s go to supplier of hardware.

So when you’re looking for fracking stocks, SLB should be your very first stop. But it certainly shouldn’t be your last. Because while the hardware is important, you can’t fracture anything without this industry’s version of “software.”

Fracking Stocks: The Soft-ware

When I say software, I’m not talking about the complex programs that help run the drilling rigs and keep them on track. That’s important. But it’s not quite as important as another “soft” part of the equation: fracking solution.

Called mud, sand, and fluid, this stuff is a mixture of mainly water and sand with a tiny percentage of chemicals (0.5%) mixed into it. It’s pumped at extremely high pressure through holes at the very end of the wellbore to create paper-thin cracks in the rock. Once the rocks are cracked, the oil can freely flow into the well and down the pipeline.

Here, you’ve got big players like SLB offering solutions. But you’ve also got smaller, less well-known companies that might present more upside potential for investors with a little more risk appetite for their fracking stocks.

And one of the best of those smaller fracking stocks is ProFrac Holding Corp. (NASDAQ: ACDC). Based out of Texas, ProFrac’s big advantage despite its smaller size is that it’s entirely focused on the U.S. tight oil market. It’s not spread out all over the world trying to specialize in all forms of oil recovery.

That’s made ProFrac one of the top suppliers for companies trying to unlock shale oil across the United States. And it also makes ProFrac one of the top fracking stocks investors should consider.

Fracking Stocks: The Producers

Now we get to the part of the equation everyone probably already understood about fracking stocks. Once SLB supplies the drills and ProFrac provides the fluid, somebody has to operate the well and extract the oil. And that’s where the producers come into the fracking stocks story.

And this is another segment with a lot of big companies to choose from. Chevron Corp. (NYSE: CVX), Civitas Resources Inc. (NYSE: CIVI), and Occidental Petroleum (NYSE: OXY) all engage in fracking.

But the thing is that the multinational oil companies tend to be on the lagging edge of any boom.

And you probably want your fracking stocks to be on the leading edge for maximum profitability. If that’s the case, you should be looking at the smaller companies fracking in the same areas as the major ones like Chevron, Civitas, and Oxy…

Fracking Stocks: The Next Generation

Fracking stocks like this one:

It’s completely surrounded. And not by companies like Chevron, Civitas, and Occidental but by Chevron, Civitas, and Occidental themselves. Not only that, but this is a field Chevron, Civitas, and Occidental all paid tens of billions of dollars to get a stake in.

Yet this little company still sits right at the heart of their most prized operations. And it sits on top of an oil reserve estimated to be worth as much as $2.4 billion or more. But it gets even better. Because this company actually bought those assets directly from one of those massive companies that had just paid billions to buy them.

Long story short: This tiny company is sitting on billions in oil, is valued at only a few hundred million dollars, and is surrounded by massive companies that are chomping at the bit to buy back the assets they foolishly sold a few years ago.

It’s easily one of the best of the fracking stocks I’ve ever seen. And its potential for profits, especially now that Trump is heading back to D.C. with a GOP majority backing him, is tremendous.

So tremendous, that I’ve drafted a full report for my premium investors to take full advantage of the unique situation presented. And now that they’re positioned, I’d like to share it with you, too. Because I’m convinced this could be the fracking stock of the decade. And I want you to get a piece of the profits.

The Bottom Line on Fracking Stocks

The bottom line here is that Trump is likely going to help the U.S. oil industry to grow faster and produce more. And the majority of that growth will come from tight oil formations that require hydraulic fracturing. So fracking stocks like the ones we discussed today are likely to do very well over at least the next two years.

But this is just a start and a short list of top fracking stocks. There’s a whole lot more information out there, especially at our sister site, Energy and Capital.

So once you’re done reading my report, make sure you continue your education about fracking stocks with my colleagues over there, too.