Get Premium to unlock powerful stock data

4 Energy Stocks With High Financial Strength and Fair GF Values

Stocks to consider as increasing yields lead to rotation out of tech shares

Author's Avatar
Sep 28, 2021
Summary
  • U.S. markets decline as Treasury yields surge near three-month highs.
  • Despite this, crude oil prices climb near three-year highs.
  • Investors can find opportunities in energy stocks with high financial strength and fair GF Values.
Article's Main Image

In light of increasing crude oil prices and Treasury yields pressuring technology shares, four energy stocks with high financial strength and trading at fair GF Values are Dril-Quip Inc. (

DRQ, Financial), REX American Resources Corp. (REX, Financial), Evolution Petroleum Corp. (EPM, Financial) and Natural Gas Services Group Inc. (NGS, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.

U.S. markets tumble as increasing yields weigh on technology shares

On Tuesday, the Dow Jones Industrial Average closed at 34,299.53, down 569.84 points from Monday’s close of 34,869.37. Likewise, the Nasdaq Composite Index closed at 14,546.68, down 423.29 points or 2.83% from the previous close of 14,969.97.

1442936723704123392.png

Tech shares tumbled as the 10-year and 30-year Treasury constant maturity rates climbed close to three-month highs as investors monitored the Federal Reserve’s announcement that it will soon taper bond purchases.

1442941434758959104.png

Crude oil prices near three-year high

Sanctuary Wealth Chief Investment Officer Jeff Kilburg said in a note that the “selling pressure” in technology shares follows a pattern from last year, in which increasing interest rates led to the “reflation and rotation trade” away from technology stocks.”

West Texas Intermediate crude prices topped $70 on Sept. 20, close to the three-year high of approximately $75 in October 2018.

1442945981699067904.png

As such, investors may find opportunities in energy stocks with high financial strength and are trading at a fair GF Value. Based on Peter Lynch’s earnings line concept, GuruFocus’ exclusive valuation method considers a company’s historical price multiples and adjusts for past performance and future growth estimates.

Dril-Quip

Shares of Dril-Quip (

DRQ, Financial) traded around $24.85, showing the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.72.

1442948801940688896.png

GuruFocus ranks the Houston-based drilling equipment company’s financial strength 8 out of 10 on several positive investing signs, which include a strong Altman Z-score of 6.39 and cash-to-debt and debt-to-equity ratios outperforming more than 83% of global competitors.

1442953875307892736.png

Gurus with holdings in Dril-Quip include

Ken Fisher (Trades, Portfolio)’s Fisher Investments and Mario Gabelli (Trades, Portfolio)’s GAMCO Investors Inc. (GBL, Financial).

1442954159786561536.png

REX American Resources

Shares of REX American Resources (

REX, Financial) traded around $79.86, showing that the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.73.

1442955119132938240.png

GuruFocus ranks the Dayton, Ohio-based alternative energy and ethanol production company’s financial strength and profitability 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8, a strong Altman Z-score of 9.35 and debt ratios that outperform more than 80% of global competitors.

1442957859494039552.png

Evolution Petroleum

Shares of Evolution Petroleum (

EPM, Financial) traded around $5.65, showing the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 1.03.

1442958403268775936.png

GuruFocus ranks the Houston-based company’s financial strength 7 out of 10 on several positive investing signs, which include a strong Altman Z-score of 5.11 and interest coverage and debt ratios that outperform more than 75% of global competitors.

1442960080466087936.png

Natural Gas Services

Shares of Natural Gas Services (

NGS, Financial) traded around $9.97, showing that the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 0.93.

1442960526781976576.png

GuruFocus ranks the Midland, Texas-based energy service company’s financial strength 7 out of 10 on the back of leverage ratios outperforming more than 83% of global competitors despite a moderately weak Altman Z-score of 2.39.

1442963467035217920.png

Become a Premium Member to See This: (Free Trial):

» Take a Free Trial of Premium Membership

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
Rating:
3 / 5 (1 votes)
Author's Avatar
WRITTEN BY

GuruFocus Screeners

Related Articles