One of the parts of my Saturday morning routine is perusing Barron's. I was going over the top insider buy section while getting in some elliptical time to try work off the vestiges of the Thanksgiving festivities, when I noticed one of my small cap energy holdings had one of the top insider buying volumes listed in this week's issue. Given its cheap valuations, positive chart momentum and accelerating growth; the shares look poised to go much higher.
TETRA Technologies (NYSE:TTI) operates as a diversified oil and gas services company. The company operates in three divisions: Fluids, Production Enhancement, and Offshore.
6 reasons TTI is a good growth pick up at under $7 a share:
- Several insiders have bought more than 300,000 shares in November.
- The stock has been in a breakout phase for over a week now.
- TTI sells for just over 8x forward earnings, a discount to its five year average (12.3).
- Revenue growth is projected to accelerate to over 12% in FY2013 from just under 5% in FY2012. The stock has a minuscule five year projected PEG (.40).
- The 10 analysts that cover the stock have a $10 price target on the stock, and Wunderlich initiated the shares as a "Buy" in late September.
- The stock is cheap at just 95% of book value and just over 60% of annual revenues (at the bottom of its five year value range based on this metric).
Disclosure: I am long TTI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.