Danny Moses Advocates for Energy Sector Investments Amid Market Shifts

Danny Moses, renowned investor and founder of Moses Ventures, has expressed a bullish outlook on the energy sector, which he describes as currently undervalued. His remarks came during an appearance on CNBC's Power Lunch on June 9, 2025, where he emphasized that the energy sector's representation in the S&P 500 has plummeted to a mere 3%, significantly lower than its historical average of approximately 7%. This decline, he argues, is not indicative of the sector's intrinsic value, particularly in light of recent mergers and acquisitions that have strengthened balance sheets across the industry.

Moses, who gained notoriety for his successful bets against mortgage-backed securities prior to the 2008 financial crisis, pointed out that the energy stocks have undergone substantial transformations over the past few years. "These energy stocks, the last four to five years, have gone through transformational M&A. Their balance sheets are in much better shape. No one’s going to tell them to drill baby drill when they don’t want to. It makes much more economic sense to own these stocks," he stated.

Despite the broader market's performance, which has seen the S&P 500 energy sector suffer a 3% loss this year due to declining oil prices and increased OPEC+ supply, Moses remains optimistic. He noted that the U.S. West Texas Intermediate crude oil price has dropped about 9% this year, settling around $65 per barrel. Yet, he believes the current market dynamics present a unique opportunity for investment.

Among his recommendations, Moses highlighted Exxon Mobil and Diamondback Energy as prime investment opportunities. He referred to Exxon Mobil as a "cheap name" with a solid growth rate, substantial dividend payments, and a robust stock buyback program. Similarly, he praised Diamondback Energy for its favorable economic positioning within the sector.

Moses's perspective is supported by data from the U.S. Energy Information Administration (EIA), which indicates that the energy sector has faced challenges due to fluctuating crude oil prices and geopolitical tensions affecting supply chains. According to the EIA's 2023 report, energy stock valuations have historically correlated with oil price trends, establishing a baseline for investor expectations.

Additionally, Dr. Rachel Green, an expert in energy economics at Stanford University, elaborated on the implications of Moses's analysis. "The energy sector is undergoing a significant transformation, especially with the push towards sustainable energy. However, traditional energy companies like Exxon Mobil and Diamondback are adapting effectively, making them viable investments in the current landscape," she stated, referencing her 2022 study published in the Journal of Energy Markets.

Critics of Moses's bullish stance, however, caution against overlooking the global push for renewable energy alternatives. Dr. Michael Thompson, a researcher at the Brookings Institution, noted, "While traditional energy firms may currently appear undervalued, investors must consider the long-term trends favoring renewable energy. The transition is inevitable, and it could impact the future profitability of fossil fuel companies."

In conclusion, the energy sector presents a complex investment landscape characterized by recent underperformance and significant transformation. Investors like Danny Moses advocate for a closer examination of specific stocks within this sector, suggesting that strategic investments could yield positive returns as the market begins to recover. As the energy sector continues to evolve, stakeholders must remain vigilant about emerging trends and potential disruptions that could reshape the investment narrative in the coming years.