As always, please use my analysis as a starting point for your own research.
Suncor Energy (SU) is a Canadian integrated energy company that is the largest producer of oil by volume in Canada.
The performance of the company has been commendable and it has recorded significant growth in revenue and EPS. The company has solid financial standing and impressive cash flows, which makes its valuation levels extremely attractive. Surprisingly, these strengths of the company have not been reflected in the stock price and the reason for this may be the reliance of the company’s performance on oil prices.
Suncor’s competitive advantage lies in their massive oil reserve that enables it to reap the maximum benefit of increasing oil prices. However, this can be a double edged sword as their huge reserves also mean that they have an extremely high operating cost. Therefore, the company suffers when oil prices drop because their margins are lesser than their competitors.
Suncor Energy has a market capitalization of over $53 billion and an average trading volume in excess of 5.3 million. The stock is currently trading at the price of $35 and the price to earning ratio is 12.8, which is much lower than the industry average of 16.3. This means that the stock is providing excellent value for money at the current price - Solid BUY.
Anadarko Petroleum (APC) is an independent company that is engaged in the exploration and production of oil and natural gas.
APC has a market capitalization of over $43 billion and an average trading volume of 3.5 million . The stock is currently trading around $87 and the 52 week low-high range of the stock is $57 to $88. The stock of APC mainly traded in the range of $60 to $80 throughout the last year and has finally been able to break through the level of $80.
The stock is currently at his highest point over the 5 year horizon and this shows that the investors are confident about the performance of the stock and the overall energy sector. It should be noted that the company suffered heavy losses in 2011 primarily because of a $3.9 billion settlement related to the Deepwater Horizon debacle. The earnings of the company have improved tremendously and the investors are confident that the stock is going to surge - BUY
Southwestern Energy (SWN) is a large scale oil and natural gas exploration, development and production company that operates in North America.
SWN revenues increased by almost 22% and as a result it was able to rebound from the losses it suffered the year prior to that. It recorded a return of equity of almost 23% and has a price to earning ratio of around 18.95. This means that the company is poised for growth and this makes it an excellent investment.
The market capitalization of the company is $11.7 billion and the average trading volume is almost 6 million. The stock is currently trading around $35 and the 52-week low-high range is of $28 to $49. The EPS last year were $1.80 and though the company paid no dividend, it is expected that it will do so in the future once it has stabilized after its current growth.
The company can further increase its attractiveness by improving its debt-to-equity ratio of 84%. The stock of SWN is highly recommended because of growth potential and its spectacular performance over the years – BUY.
Denbury Resources (DNR) is a large scale oil and gas exploration, development, and production company. It is also responsible for acquiring oil and gas properties and it operates in the United States primarily in the primarily in Mississippi, Louisiana, and Texas.
DNR has a market capitalization of over $7.6 billion and an average trading volume of 5.6 million. It is currently trading around $19 and the 52-week price ranges from $10 to $26. The analysts are expecting the company’s net income to increase by 50% in its earning reports to 33 cents per share. Over the last three months, the average estimate of the analysts has risen by 7 cents per share to reach the current level of 33 cents per share.
The experts are confident about the performance of the company and the question that remains is that will DNR be able to outperform and beat the estimates of the analysts for the 3rd quarter in a row. The financial indicators of the company are sublime and the future is bright. The experts are confident of their performances and so you should be as well – STRONG BUY.
Quicksilver Resources (KWK) is Texas based company with 25 years worth of experience pertaining to the energy sector. KWK is engaged in the exploration, development, production of oil and gas in United States and Canada.
KWK has a market capitalization of almost $939 million and the average trading volume is around 4 million. The stock is currently trading at the price of $5 that is near the low end of the 52-week range of $4 to $15.
There are some financial indicators like the levered free cash flow that amounts to a negative 441 million is cause of concern. However, there is tremendous potential in this small cap. KWK has numerous new properties that they will develop and these bright prospects are resulting in an increased interest of investors.
This is evident from the increasing trade volume of the stock and analysts believe that the KWK share price is below P/B valuation. This means that the stock is trading below its intrinsic value and ready to climb in the near future. This makes it an excellent investment and the right time to buy the stock of KWK is now because the growing interests of the investor will push its price upward to the point where it will no longer be feasible – BUY.
About the author:I'm mostly interested in income investing using dividends, preferred stocks and other debt instruments, and pair trading.
I fundamentally analyze every business from the top down.
In my personal life, I have a strong Jewish faith and enjoy playing Scrabble and entrepreneurship.