Oil prices have continued rebounding this year, with the U.S. benchmark price WTI up another 7% to around $65 per barrel. That improving oil price has helped drive up most oil stocks. I say most because Devon Energy (NYSE:DVN), Apache (NYSE:APA), and Newfield Exploration (NYSE:NFX) are flat to down so far this year because investors seem to have overlooked them entirely. Because of that, they trade for a dirt-cheap valuation versus their peers, making them intriguing options to consider.

This sell-off doesn't make any sense

Newfield Exploration is the cheapest in the group after tumbling more than 9% this year. Because of that, shares currently sell for just 5.5 times cash flow from operations, which is at the bottom of the barrel in its peer group where most others fetch more than 10 times cash flow from operations.

Oil pumping unit at sunset.

Image source: Getty Images.

There's no logical reason for Newfield Exploration's stock to have sold off this year nor trade at such a low valuation. The company has reported earnings twice, beating expectations both times. The company also released its three-year outlook, which would see it increase production at a 15% to 20% compound annual rate -- fueled mainly by its prime position in the STACK Shale Play -- even as it lives within the cash flow it can produce as long as oil averages $55 per barrel. Because of that, Newfield sees its leverage ratio improving from an already conservative 2.0 times debt-to-EBITDA over the course of its three-year plan. Those factors make it hard to overlook Newfield's upside potential given its dirt-cheap valuation.

Hidden value waiting to be unlocked

Apache has also lost value this year, falling about 1%. Because of that, shares currently trade at about six times cash flow from operations, which makes it a screaming bargain in my opinion. If there has been one knock against Apache over the past year, it's that production from the recently discovered Alpine High play isn't growing as fast as the company initially expected. However, that's because the company has focused on building out the necessary infrastructure so that it can maximize the value of the play's production. As those midstream assets come on line, Apache should be able to quickly ramp up output, which positions it to grow production at an 11% to 13% annual pace through 2020.

What makes Apache an oil stock that investors won't want to miss is that they not only get a fast-growing oil stock for a cheap price, but the company is also creating hidden value in the way it's building out its midstream business. The company could begin to unlock some of that value this year by monetizing its midstream business, which is one of its priorities for 2018. That double dose of upside potential makes it look like a compelling oil stock to consider buying these days

An oil pump at dusk.

Image source: Getty Images.

The catalyst investors won't want to miss

Devon Energy is the lone member of this trio that hasn't lost value this year, though it's only up about 1%. Because of that, shares trade at slightly more than seven times cash flow, which rose another 11% last quarter, thanks to improving oil prices, rising production, and falling costs.

Devon Energy firmly believes its shares are trading for an unjustifiably low valuation given the growth it sees up ahead. The company's current three-year plan would see it grow U.S. oil production at a mid-teens compound annual rate, which would boost cash flow at an even more impressive 25% yearly pace, assuming crude averages $60 per barrel. That's why the company authorized a $1 billion buyback earlier this year, which it just boosted to $4 billion by monetizing its midstream business. At the current share price, that's enough to retire roughly 20% of its outstanding stock, which has the potential to fuel a big-time move in the company's stock price in the coming year.

The market is missing the upside here

Newfield, Apache, and Devon haven't participated in the oil stock rally this year despite being on pace to increase production at a healthy pace even if oil falls from the current level. Because of that, they trade at bargain prices given the growth they have coming up. That's why investors won't want to overlook these oil stocks any longer.

Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.