It's no surprise that the broad market is down some 13% over the past three months as concerns about spiraling federal deficits, China's possible economic slowdown, and the plunging euro have all combined to rattle investors.
But in particular, the never-ending BP (NYSE: BP ) Gulf of Mexico oil spill saga has taken front stage. BP, Transocean, and Halliburton have all gotten pummeled as of late -- but along with the market collapse comes some pretty severe collateral damage. And it hasn't been isolated to companies doing business in the Gulf. In fact, the iShares S&P Global Energy Sector ETF has dropped by about 20% over the past three months. But in all this carnage, surely there are bound to be some hidden gems worth looking into further.
So I ran a screen for energy companies that have dropped over the past few months, that are trading for price-to-earnings ratios less than 15, that can grow earnings by at least 20% over the next year, and that have the coveted five-star rating by our 165,000-strong CAPS community. Here's what I found:
|
Companies
|
% Price Change
(3 months)
|
Price-to-Earnings
Ratio
|
% Earnings Growth
(Next Year)
|
|
USEC (NYSE: USU )
|
(22.5%)
|
14.9
|
205.6%
|
|
ConocoPhillips (NYSE: COP )
|
(6.3%)
|
11.9
|
68.1%
|
|
North American Energy Partners (NYSE: NOA )
|
(14.5%)
|
11.6
|
64.9%
|
|
Royal Dutch Shell (NYSE: RDS-A )
|
(14.8%)
|
10.4
|
61.7%
|
|
Spectra Energy (NYSE: SE )
|
(11.9%)
|
14.7
|
30.3%
|
|
Statoil ASA (NYSE: STO )
|
(17.6%)
|
13.8
|
24.7%
|
*Capital IQ, a division of Standard & Poor's; Google Finance.
The companies above offer a pretty diverse range of businesses -- Statoil, for instance, is a Norwegian oil and gas behemoth; however, it derives at least 20% of its business from natural gas and has operations everywhere from Scandinavia to Singapore. North American Energy may be a Canadian oil and gas service provider, but it obtains most of its revenues from its mining and construction segment. If the oil sands in Canada get a big bump in production because of the BP disaster here at home, companies like North American Energy could see a similar bump in activity.
Houston-based Spectra Energy is a pretty solid-looking company itself. Our own CAPS All-Star member jahartmu thinks Spectra has everything you'd be looking for in a natural gas company:
Decent P/E and price-to-book ratios, a healthy dividend, and a good chance natural gas will become more important in the coming years despite whatever supply glut may currently exist.
This definitely isn't a list of automatic buy recommendations; however, it is a great place to start doing your own due diligence if you're interested in some great-looking, cheap energy stocks.
Have a different opinion? Sound off in the comments below or head over to the CAPS page and let us know what you think!
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