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Interested in finding undervalued stocks in the oil & gas sector? For ideas on where to look, we ran a screen you might be interested in.

We screened the oil & gas sector for stocks that appear undervalued relative to EPS trends. Based on the theoretical assumption that if P/E is equal to a constant K, growth in EPS estimates should be matched by proportionate growth in price. When they don't match up, a mispricing may have occurred. We screened for those exhibiting this mismatch between changes in EPS estimate and price.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.

1. Penn West Petroleum Ltd. (NYSE:PWE): Engages in acquiring, exploring, developing, exploiting, and holding interests in petroleum and natural gas properties and related assets in North America. Market cap at $5.14B, most recent closing price at $10.72. The EPS estimate for the company's current year increased from 0.46 to 0.51 over the last 30 days, an increase of 10.87%. This increase came during a time when the stock price changed by -7.2% (from 11.53 to 10.7 over the last 30 days).

2. TransAtlantic Petroleum Ltd. (NYSEMKT:TAT): Engages in the acquisition, development, exploration, and production of crude oil and natural gas. Market cap at $324.45M, most recent closing price at $0.88. The EPS estimate for the company's current year increased from 0.07 to 0.08 over the last 30 days, an increase of 14.29%. This increase came during a time when the stock price changed by 12.5% (from 0.8 to 0.9 over the last 30 days).

3. Atlas Pipeline Partners LP (NYSE:APL): Engages in gathering and processing natural gas. Market cap at $2.16B, most recent closing price at $33.82. The EPS estimate for the company's current year increased from 1.01 to 1.08 over the last 30 days, an increase of 6.93%. This increase came during a time when the stock price changed by 5.71% (from 31.72 to 33.53 over the last 30 days).

* EPS data sourced from Yahoo Finance, all other data sourced from Finviz.

Source: 3 Oil & Gas Stocks Undervalued By EPS Trends