When investors graph out the difference between prices in the iShares S&P 500 Value ETF (NYSEARCA: IVE) and its distant opposite the iShares S&P 500 Growth ETF (NYSEARCA: IVW), they’ll notice that today’s level would imply that value stocks are now a tremendous opportunity to buy, but there is an even greater indicator at play for the energy sector.
Acting as a mirror image of oil prices, this value-to-growth spread and its recent selloffs would call for a major rally in oil prices. This is why investors need to start considering stocks in the oil value chain, such as Transocean Ltd. (NYSE: RIG) at the top of the value chain, Occidental Petroleum Co. (NYSE: OXY) as a Warren Buffett pick, and finally, a bottom-market pick through Exxon Mobil Co. (NYSE: XOM).
