During 2013, North American energy stocks lacked some of the incredible performance seen in other sectors, but in 2014 the energy stocks have gained momentum and are catching the market attention. During the past 3 months, the U.S. S&P 500 Energy Sector Index has outperformed the S&P 500 Index by over 5%, while the Canadian S&P/TSX Composite Energy Sector Index outperformed TSX Composite index by over 8%. The recent trend of selecting value stocks over growth stocks could be a possible factor since many of the value names happen to be in the energy sector. Moreover, the rising oil and natural gas prices have also pushed the stocks higher.
Additionally, the Energy Information Administration (EIA) estimates WTI prices will remain relatively high during 2014 and strong crude oil production growth primarily in the Bakken, Eagle Ford and Permian regions in North America will continue through 2015. EIA forecasts production to reach 8.4 million barrels per day in 2014 and 9.1 million barrels per day in 2015, from an estimated 7.4 million barrels per day in 2013.
Ubika Research has shortlisted 11 undervalued energy stocks which are expected to register strong growth during 2014 based on the consensus estimates of analysts polled by Bloomberg. We have picked stocks which are expected to report strong growth in sales and EPS during 2014. Moreover, these stocks are trading at relatively low forward PE and P/CF multiples coupled with a PEG ratio below 1. Moreover, the shortlisted stocks have recorded significant share price gains year-to-date. During the past three months, the majority of the shortlisted stocks have accumulated gains with 3 month daily average trading volume in excess of 100,000 shares.
Indices and Price Performance
| Index |
Last Index Value |
Value Change |
Value Change |
Value Change |
|
S&P 500 Index |
1,879.55 |
2.8% |
1.7% |
19.1% |
|
NASDAQ Composite Index |
4,161.46 |
-1.4% |
-0.4% |
27.3% |
|
S&P/TSX Composite Index |
14,555.97 |
4.5% |
6.9% |
20.4% |
|
S&P 500 Energy Sector Index (U.S.) |
682.06 |
7.8% |
4.7% |
20.8% |
|
S&P/TSX Composite Index Energy Sector Index (Canada) |
3,322.41 |
12.5% |
13.9% |
27.3% |
|
WTI Crude Prices ($ per barrel) |
101.41 |
6.7% |
4.2% |
16.0% |
|
Brent Crude Prices ($ per barrel) |
109.37 |
3.1% |
-0.1% |
12.0% |
Stocks list
| Company Name |
Exchange |
Ticker |
Market Cap |
Last Price |
Average Volume |
Price Change |
Price Change |
Sales Growth |
EPS Growth |
PEG Ratio |
1-Yr Forward PE Ratio |
1-Yr Forward P/CF Ratio |
|
Forum Energy Technologies |
NYSE |
FET |
2,891.7 |
31.08 |
348,633 |
20.7% |
10.0% |
12.8% |
18.1% |
0.88 |
17.5 |
12.70 |
|
Ultra Petroleum Corp |
NYSE |
UPL |
4,685.7 |
30.60 |
3,808,104 |
31.4% |
41.3% |
28.0% |
53.8% |
0.93 |
12.1 |
6.77 |
|
Precision Drilling Corp |
TSX |
PD |
4,165.6 |
14.26 |
2,484,184 |
42.6% |
43.5% |
15.6% |
39.7% |
0.37 |
15.5 |
6.20 |
|
Enterprise Group Inc |
TSX |
E |
149.6 |
1.08 |
1,815,247 |
10.2% |
38.5% |
138.2% |
53.8% |
NA |
8.8 |
5.84 |
|
Enservco Corp |
NYSE |
ENSV |
80.0 |
2.20 |
113,157 |
-5.2% |
21.5% |
34.2% |
108.3% |
0.44 |
8.8 |
5.64 |
|
Bellatrix Exploration Ltd |
TSX |
BXE |
1,794.0 |
10.46 |
1,652,334 |
21.9% |
33.9% |
152.2% |
71.5% |
NA |
15.6 |
4.89 |
|
Triangle Petroleum Corp |
NYSE |
TPLM |
827.6 |
9.63 |
1,458,760 |
13.3% |
15.7% |
79.7% |
29.8% |
0.29 |
14.5 |
4.53 |
|
Longview Oil Corp |
TSX |
LNV |
325.0 |
6.92 |
1,076,255 |
46.0% |
43.9% |
33.8% |
23.9% |
NA |
12.7 |
4.34 |
|
Kodiak Oil & Gas Corp |
NYSE |
KOG |
3,581.1 |
13.45 |
5,903,247 |
21.3% |
20.0% |
38.8% |
65.3% |
0.42 |
15.4 |
4.31 |
|
Jones Energy Inc |
NYSE |
JONE |
755.7 |
15.31 |
158,808 |
-1.5% |
5.7% |
39.1% |
277.3% |
0.52 |
15.6 |
3.19 |
|
Pacific Ethanol Inc |
NASDAQ |
PEIX |
308.5 |
15.65 |
1,772,710 |
91.1% |
207.5% |
17.0% |
676.5% |
0.19 |
2.9 |
NA |
Source: Bloomberg
Company Description:
Forum Energy Technologies Inc (NYSE: FET)
Forum Energy Technologies Inc. manufactured technologies and applied products to the energy industry. The company designs, manufactures, and provides products and related services to the drilling and intervention sectors, as well as to the subsea services, and construction sectors.
Ultra Petroleum Corp (NYSE: UPL)
Ultra Petroleum Corp. is an independent exploration & production company focused on developing its long-life natural gas reserves in the Green River Basin of Wyoming – the Pinedale and Jonah Fields and is in the early exploration and development stages in the Appalachian Basin of Pennsylvania.
Precision Drilling Corp (TSX: PD)
Precision Drilling Corporation is an integrated oilfield drilling and energy service company providing services to the oil and gas industry. The company provides oilfield rentals, well services, catering services, and drilling services through its several business units.
Enterprise Group Inc (TSX: E)
Enterprise Group, Inc. is a pipeline construction and oilfield maintenance company. The company seeks business in Central and Northern Alberta’s oilfields.
Enservco Corp (NYSE: ENSV)
Enservco Corporation offers fluid-related services to the oil and natural gas production industry. The company offers hot oiling, frac heating, and water hauling services. Enservco operates in Colorado, Kansas, New Mexico, Oklahoma, Pennsylvania, Texas, Utah, West Virginia and Wyoming.
Bellatrix Exploration Ltd (TSX: BXE)
Bellatrix Exploration Ltd. explores for oil and natural gas.
Triangle Petroleum Corp (NYSE: TPLM)
Triangle Petroleum Corp. is an oil and gas exploration company. The company is focused on the acquisition and development of acreage in the Williston Basin in North Dakota and the development and exploitation of its existing asset base in the Maritimes Basin in Nova Scotia.
Longview Oil Corp (TSX: LNV)
Longview Oil Corporation operates long life crude oil and natural gas properties. The company conducts low-risk drilling, recompletion and enhanced oil recovery activities. Longview Oil focuses on oil development opportunities in Central Alberta and Southeast Saskatchewan.
Kodiak Oil & Gas Corp (NYSE: KOG)
Kodiak Oil & Gas Corporation is an independent energy company. The company is focused on the exploration, exploitation, acquisition and production of natural gas and crude oil in the United States. Kodiak’s operations are primarily concentrated in the Williston Basin of North Dakota and Montana and the Green River Basin of Wyoming and Colorado.
Jones Energy Inc (NYSE: JONE)
Jones Energy Inc is an independent oil and gas company engaged in the development, production and acquisition of oil and natural gas properties in the Anadarko and Arkoma basins of Texas and Oklahoma.
Pacific Ethanol Inc (NASDAQ: PEIX)
Pacific Ethanol, Inc. produces and markets low-carbon ethanol. The company also identifies and develops other renewable fuel technologies, such as cellulose-based ethanol production and bio-diesel.
