Santos Ltd (ASX: STO) shares have been among the top performers on the S&P/ASX 200 Index (ASX: XJO) this year.
Since the closing bell on 31 December, Santos shares are up 28%. That compares to a gain of 1% posted by the S&P/ASX 200 Index (ASX: XJO) over that same period.
And with Brent crude oil prices up another 1.2% overnight Monday to US$109 per barrel, the Santos share price closed up 2.27% on Tuesday.
So why may now be a good time to sell?
Why this fund manager is selling
According to Catapult Wealth's Timothy Haselum, now is a good time to exit Santos shares "on strength".
In a note published in the Advertiser over the weekend, Haselum said:
The Ukraine conflict has seen energy prices skyrocket on the speculation of oil and gas sanctions in a time where new energy project approvals are out of vogue with climate conscious countries.
Indeed, skyrocketing energy prices have seen the S&P/ASX 200 Energy Index (ASX: XEJ) leap 30% higher year-to-date, trouncing the ASX 200 benchmark.
With oil and gas trading near multi-year highs, Haselum said: "Energy companies like STO look great at the moment, with net cash positions and strong balance sheets, and we have seen incredibly strong rallies from their lows."
So why sell Santos shares today?
"You have to think ahead here," Haselum said. "We know that green/renewables are the future, so what's the long-term plan? The long-term trend is down, and as green energy gains momentum, the opportunities to exit on strength will get rarer."
How have Santos shares been tracking longer term?
Santos shares remain down 9% from their five-year highs, posted on 10 January 2020, when Brent crude was worth a mere US$65 per barrel.
The share price cratered in the early months of the global pandemic as energy demand evaporated.
Although the ASX 200 energy giant has rebounded strongly since its March 2020 lows, shares have yet to fully recover despite surging oil and gas prices.
