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5 Oil & Gas Candidates To Consider Now
Posted by: Dividend King (IP Logged)
Date: March 24, 2012 11:39PM
The market outlook for the oil and gas sector in 2012 looks very positive. Therefore, it becomes crucial to select the right stocks within the oil and gas sector, so as to enable one to reap profits on a considerable uptrend in this sector. However, it is vital to know that not every stock in the oil and gas sector would react to the estimated upswing. Also, while choosing the companies engaged in oil production, distribution, and acquisition, one cannot neglect the companies which are involved in operating processes pertaining to natural gas. Therefore, in planning of the oil and gas portfolio, one has to also give attention to the companies involved in exploration and extraction of energy resource such as natural gas. More so, natural gas is said to be the prime future prospect of energy. Moreover, most of the reserves of natural gas still remain untapped. Thus, one has to make a careful selection of those companies who are well equipped with resources and who have a sound asset base to enable the exploration or extraction of the natural reserves. There are many stocks that have fallen to a great extent in the past year or so. It therefore becomes pertinent for one to choose from amongst these oversold stocks, with a medium to long term perspective. Following are certain stocks from the oil and gas sector, who are primarily involved with activities pertaining to natural gas, and which look attractive at their current market price.
Questar (STR) is currently priced at around $19, within its 52 week range of $20.17 and $16.36 respectively. Having a dividend yield of approximately 3.35%, the company has paid dividend payments of $2.50, in the past 5 years. The stock has shown a promising growth of around 12% in the past year, with its current price to book ratio depicting around $3.1. The stock's trailing twelve months price to sales multiples depicts multiples of approximately 3. The investors should look into investing in this company, having core business of natural gas exploration, distribution, acquisition, marketing, and distribution. Moreover, this stock is favorable to those seeking for a steady dividend income and appreciation in capital. I would recommend this stock to be purchased at its current market price, with a short to medium term perspective.
W&T Offshore (WTI) is currently trading at around $22, within its 52 trading range of $29.27 and $11.87. The company focuses on oil and natural gas projects based in the Gulf of Mexico. The company's earnings per share is around $1.95, whereas its price earnings ratio depicting to be $11.70. In my opinion, exploration and oil extraction companies would garner a pullback in 2012. As for W&T Offshore, Inc., the company has strong potential to upscale its potential in optimal utilization of its resources, in carrying out its exploration activities in the Gulf of Mexico. Moreover, considering its fundamentals, the stock looks oversold. With a market capitalization of $1.71 million, and estimated earnings of around $2.01 in 2012, I would recommend purchasing this stock at its current market price, with a short term perspective.
Southwestern Energy (SWN) carries out the activities of exploration, production, and development, as an independent energy company. Southwestern Energy is currently trading at around $33, within its 52 week range of $49.25 and $28.37. It has a price earnings ratio of around $18.70, while its earnings per share stand at around 1.80. Southwestern Energy Co. has lost around 20.65% in the past quarter. However, the company depicted an increase in 2011 third quarter net income of $175 million, versus $161 million in 2010 third quarter. In my opinion, Southwestern Energy Co. looks oversold, and would be a good purchase at its current levels in consideration with other fundamentals of the company. Analyzing oversold stock in the energy sector should be an optimal strategy for one's purchase of stocks, especially when you know that the energy sector could depict a major uptrend in the near future, and specifically in 2012.
Stone Energy (SGY) is currently trading within its 52-week range of $35.94 and 14.64, at around $33. With a price earnings ratio of around 9, earnings per share of around $3.46 and market capitalization of $1.62 billion, Stone Energy looks good for purchase at its current market price. Especially when the company is nearing its 52-week highs, and with a good 2012 market outlook poised for the oil & gas sector, this stock looks very attractive at its current level. Moreover, the company has performed very well in 2011, depicting a revenue growth in the quarter of around 35.6% on year on year basis, and approximately 165% increase in earnings growth on year on year basis. In my opinion, if you are looking to purchase stocks in the oil & gas sector, with a good prospect for growth, Stone Energy should be purchased at its current price, keeping a long term perspective.
Quicksilver Resources (KWK) carries out exploration, extraction and such other activities pertaining to production of natural gas. The current market price of the company is around $5, trading within its 52-week range of $15.98 and $4.14 respectively. Quicksilver Resources depicts price earnings of around $2.50, while its earnings per share are poised at $2.13 approximately. Having a relative strength index of below 40, Quicksilver Resources Inc. appears to be oversold, and which could garner a pull back in the current year. Moreover, the company envisions to reduce its debt s through their Quicksilver Production Partners (QPP) IPO offering. At its current market price, I recommend purchasing shares of Quicksilver Resources at its current market price, with a short to medium term perspective.
Stocks Discussed: STR, WTI, SWN, SGY, KWK,