Energy stocks are cheap, even after wild run, says strategist

Energy stocks have room to go higher, even after a wild run this year, says one strategist.

The Tortoise portfolio manager Rob Thummel told Yahoo Finance Live that they're still cheap if you look at it on most metrics.

The market is really rewarding companies with positive earnings and free cash flow. That is what this sector has done, said Thummel, I still think there is room for it to continue, even if oil prices stay the same, or even if they fall a bit. The yield they offer investors is the biggest driver for energy stocks going forward, according to Thummel.

The S&P 500 Energy Select ETF XLE is up 53% year to date, the best performer among the 11 sectors.

Oil prices have recently fallen with Brent futures hovering below $80 per barrel and WTI around $74.

China is driving oil prices right now. Thummel said that the concern of the China reopening is something that we have seen. When that growth returns, you're going to have higher oil prices. He notes that oil inventories are low in all parts of the world.