2 Attractive $8 A Share Energy Plays

| About: Synergy Resources (SYRG)

The market appears to be a much different beast early in 2014 than it was in 2013. Stocks are not rising consistently on a weekly basis and increasing volatility has crept into the market on concerns around the Fed's 'taper' and turmoil in the emerging markets have become major worries.

One thing that remains the same as in 2013 and the years before is that the huge domestic energy boom continues unabated. Smaller E&P plays offer great growth prospects and have no emerging markets exposure to boot. Here are two small domestic E&P plays that look attractive here. Both go for right around $8 a share.

I first highlighted fast growing Synergy Resources (NYSEMKT:SYRG) in February 2012. The stock has nearly tripled since then but still looks undervalued based on valuation and its growth prospects. Synergy's primary production comes from oil and natural gas properties primarily located in the Wattenberg field in Denver-Julesburg Basin in northeast Colorado.

Earnings are about to explode in coming years at this small, relatively unknown, E&P play. Synergy earned just 18 cents a share in FY2012. However, analysts have 45 cents a share and 83 cents a share penciled in for FY2013 & FY2014, respectfully.

Earnings are increasing as revenues & production are rising exponentially. Sales are tracking to over 150% growth in FY2013 and analysts believe another 85% gain is in store in FY2014. Insiders have been frequent & consistent buyers of the stock even as SYRG has risen nicely over the past year.

Given revenue & earnings growth, the shares are too cheap at just over 10x forward earnings. The median price target by the ten analysts that cover the stock is $13 a share, more than 50% above the current price of SYRG.

Triangle Petroleum (NYSEMKT:TPLM) is another fast growing energy play in the Bakken that appears undervalued. The shares are up more than 50% since I did a deep dive on the company in June even after a recent over 25% decline.

The company recently added to the 86,000 net acres it operates on in the Bakken and Three Forks formations in Montana and North Dakota. It also recently announced a partnership to improved its delivery infrastructure which should help margins once completed. ~85% of the company's production is oil.

The stock is 50% below the $12 a share price target the twelve analysts that cover the shares currently have on Triangle. The company lost money in FY2013 (fiscal year ends in January for Triangle) but is tracking to more than 60 cents a share in profit in FY2014. Analysts believe that will jump over 20% to nearly 80 cents a share in FY2015.

After more than quadrupling revenues in FY2014, the consensus estimate is calling for over 65% gains in revenue next fiscal year. The stock has a minuscule five year projected PEG (.25) and goes for just over 10x forward earnings. Too cheap given Triangle's growth.

Disclosure: I am long SYRG, TPLM. 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.