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| Energy was the clear standout of Q2 earnings season in the US. With most of the S&P 500 reported, the sector posted the strongest earnings growth of any group, and the reason matters as much as the result: this was driven by cash, not just crude. |
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| Technology told the other big story of the quarter, and the contrast between the two came down to cash flow. Tech is still spending heavily on its AI buildout, consuming cash now in the hope of growth later. Energy is generating it, converting high prices into free cash flow and using it to pay down debt and reward shareholders. |
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| The easy explanation is that wartime oil prices did the work. But the quarter showed something sturdier underneath: refiners and producers ran near full capacity, generating record cash and spending with discipline. |
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| Our AI's August rebalance of Energy Elite leaned into exactly this, rotating out two winners that had run their course and adding two that still pair growth with overlooked value. PBF Energy exited after a +72.8% gain and Lincoln National after +33.2%, both having climbed past fair value, according to our models. |
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| In their place for August, our AI selected CVR Energy, fresh off a 55% jump in quarterly revenue with a PEG of just 0.43, and Ovintiv, whose record cash flow and a major debt paydown earned a credit upgrade even as it trades near 6.5 times earnings. |
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| Strategy performance · as at Aug 4 close |
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| Energy Elite |
| +57.6% 1-year return |
| +19.96pp vs S&P 500 Energy |
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| Tech Titans |
| +188.7% Return since launch |
| +109.3pp vs S&P 500 |
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| Energy Elite - July performance |
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| Strategy return |
| +17.9% |
| July 2026 |
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| vs. S&P 500 Energy |
| +4.7pp |
| Outperformance |
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| Spotlight exit |
| +72.8% |
| PBF - exited |
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| Max drawdown |
| −3.9% |
| BTU - held |
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| Exited from Energy Elite this month |
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| PBF |
| PBF Energy · Held 61 days |
| Total return since picked |
| +72.8% |
Systematic rotation near peak valuation. Following a massive ~170% year-to-date surge trading near 52-week highs, the model reallocated capital as the current ~$73 price stretched well past its ~$58 analyst consensus fair value. While balance sheet fundamentals improved sharply with over $1.4 billion in net debt reduction, thin structural margins, fading wartime supply tailwinds, and near-term operational turnarounds narrowed the remaining margin of safety relative to stronger market alternatives.
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| LNC |
| Lincoln National · Held 61 days |
| Total return since picked |
| +33.2% |
| Systematic rotation following a rapid re-rating. Following a sharp ~27% one-month surge trading near 97% of its 52-week high, the model reallocated capital as the current ~$46 price fully reached analyst consensus fair value, leaving minimal price target cushion. While eight straight quarters of operating income growth and a landmark $5.8 billion reinsurance deal highlight a credible turnaround, a ~7% revenue miss, ~$2.9 billion in annuity outflows, and muted segment growth narrowed the remaining margin of safety relative to stronger market alternatives. |
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| New picks inside Energy Elite: |
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| PEG ratio: 0.4355% YoY quarterly revenue growth |
| A ~55% YoY quarterly revenue surge to $2.74 billion, dramatic EBITDA recovery, and $264 million in single-quarter free cash flow demonstrate massive fundamental expansion. While a ~57% six-month gain and ~40% YTD rally reflect powerful stock momentum, a PEG ratio of just 0.43 reveals the stock remains underpriced relative to its growth trajectory. Near-peak operations-with refineries running at 98% capacity and fertilizer plants at 99% utilization-position the business to capitalize on strong market tailwinds well into 2027. |
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| P/E ratio: ~6.5xOver 60% FCF returned to shareholders |
| A ~30% quarterly revenue jump, oil production beats, and an upgraded full-year production outlook are driving accelerating operational expansion. While a ~61% year-to-date surge has pushed the stock near 52-week highs, an adjusted P/E of 6.5 and a PEG ratio of 0.36 signal significant overlooked value relative to its ~$73 analyst price target. Exceptional ~54% gross margins, $682 million in quarterly free cash flow, and a decade-low debt level after a $3.4 billion paydown earn a Fitch credit upgrade while funding robust capital returns via buybacks and dividends. |
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| Energy Elite full list of stock picks for August: |
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| STOCK |
RETURN JUN |
RETURN YTD |
STATUS |
| 🔒 |
| Energy Elite full list of stock picks for August: |
| Investing.com paid subscribers get the full list, live rebalances, and Fair Value scores — updated monthly. |
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| *Data correct to August 4th 2026 |
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