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The market continues to track higher in its quest to surpass its 2007 highs on the S&P. Equities feel like they are getting somewhat overbought here. However, earnings continue to come in better than expected and a smart play is to buy companies with still cheap valuations that are significantly and consistently beating expectations on their earnings reports. Here are two from the energy sector that seem on a roll.

EPL Oil & Gas (NYSE:EPL) is an independent oil and natural gas exploration and production company in the United States. The company has interests in producing oil and natural gas assets in the U.S. Gulf of Mexico.

4 reasons EPL is a solid growth play at $37 a share:

  1. The company reported earnings of 61 cents a share this morning, 14 cents a share better than consensus. It also beat revenue expectations by $2mm and sales rose more than 34% Y/Y.
  2. Revenues rose approximately 20% in the just completed FY2012. Analysts expect better than 60% revenue growth in FY2013.
  3. Given the company's growth prospects, the stock is dirt cheap at under 8x forward earnings.
  4. This is the third straight quarter the company has easily beat earnings estimates and consensus earnings estimates for FY2013 had already ticked up over the last two months prior to this earnings report. Operating cash flow has grown approximately 700% since FY2009.

Delek US Holdings (NYSE:DK) operates independent refineries in Tyler, Texas, and El Dorado, Arkansas, and also is engages in marketing and retail operations.

4 reasons DK is still a bargain at $39 a share:

  1. In its earnings report this morning, the company beat revenue expectations by around 10%. It also beat on an earnings per share basis ($1.06 vs $1.01 consensus). It also declared a special dividend of 10 cents a share.
  2. This is the fifth quarter in the row that it has easily beat earnings estimates. Consensus earnings estimates for FY2013 has already moved up sharply over the last few months prior to this latest beat.
  3. The stock is selling at just 9x forward earnings, a substantial discount to the overall market. Refiners also continue to enjoy the huge spread between Brent (where gas is priced at) and WTI Oil (where input costs actually come from).
  4. The company is a cash flow machine here with operational cash flow up more than 400% since FY2010.
Source: 2 Energy Concerns Consistently Beating Earnings Expectations