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Return on Equity (ttm) is a profitability ratio that squarely takes the perspective of a shareholder relative to earnings. The metric illustrates the rate of return on shareholder equity by diving net income over shareholder equity. This gives investors a clear picture of how well shareholder money is being used by a company’s management team in order to generate earnings with shareholder equity. A stable or increasing ROE (ttm) is considered to be available because that means the firm is continuing to increase earnings without needing to garner new shareholder equity.

We started by screening for energy companies that illustrated strong profitability according to their twelve month trailing ROE (X>15%). From this narrowed pool we then looked to indentify potentially cheaper buy targets by focusing on those that had underperformed the S&P 500 over the last month. We did not screen out any companies by market capitalization.

The energy companies below are listed from worst to least worst, according to their 1-month performances:

1. Statoil ASA. (STO)

Sector

Energy

Industry

Oil & Gas Integrated

Market Cap

$77,388M

Beta

1.04

This is an integrated oil and gas company. The company has an ROE (ttm) of 19.40%. STO has fallen by 5.57% over the last month. The short interest was N/A as of 09/30/2011.

2. Questar Corp. (STR)

Sector

Energy

Industry

Oil & Gas Integrated

Market Cap

$3,394M

Beta

0.68

This is a natural gas-focused energy company that operates three subsidiaries. The company has an ROE (ttm) of 19.41%. STR has fallen by 4.31% over the last month. The short interest was 3.10% as of 09/30/2011.

3. Exxon Mobil Corporation. (XOM)

Sector

Energy

Industry

Oil & Gas Integrated

Market Cap

$376,668M

Beta

0.46

XOM explores for, produces, transports, and sells crude oil and natural gas. The company has an ROE (ttm) of 25.65%. XOM has fallen by 3.92% over the last month. The short interest was 1.00% as of 09/30/2011.

4. Western Refining Inc. (WNR)

Sector

Energy

Industry

Oil & Gas Refining & Marketing

Market Cap

$1,533M

Beta

0.89

The company refines crude oil into gasoline, diesel fuels, asphalt, other refined products. It has an ROE (ttm) of 15.18%. WNR has fallen by 3.88% over the last month. The short interest was N/A as of 09/30/2011.

5. Royal Dutch Shell PLC. (RDS.A)

Sector

Energy

Industry

Oil & Gas Integrated

Market Cap

$216,724M

Beta

0.90

The company operates in both the upstream and downstream businesses within the energy sector. The company has an ROE (ttm) of 18.28%. RDS.A has fallen by 3.47% over the last month. Short interest was N/A as of 09/30/2011.

6. Imperial Oil Ltd. (IMO)

Sector

Energy

Industry

Oil & Gas Integrated

Market Cap

$33,607M

Beta

0.92

The company explores for, produces, and sells crude oil and natural gas, along with other petroleum products. The company has an ROE (ttm) of 23.94%. IMO has fallen by 2.83% over the last month. The short interest was 1.80% as of 09/30/2011.

7. ConocoPhillips. (COP)

Sector

Energy

Industry

Oil & Gas Integrated

Market Cap

$93,832M

Beta

1.23

This is an internationally integrated energy company with six operating segments. The company has an ROE (ttm) of 17.02%. COP has fallen by 2.54% over the last month. Short interest was 1.90% as of 09/30/2011.

8. BP Plc. (BP)

Sector

Energy

Industry

Oil & Gas Integrated

Market Cap

$126,812M

Beta

1.12

BP is the world’s largest integrated oil company. The company has an ROE (ttm) of 20.83%. BP has fallen by 1.21% over the last month. The short interest was N/A as of 09/30/2011.

9. Ultrapar Holdings Inc. (UGP)

Sector

Energy

Industry

Oil & Gas Refining & Marketing

Market Cap

$9,548M

Beta

0.84

The company deals with LPG distribution in Brazil, and produces ethylene oxide, along with other principle derivatives. The company has an ROE (ttm) of 16.04%. UGP has fallen by 0.57 % over the last month. Short interest was N/A as of 09/30/2011.

We hope this list helps as investors do their own due diligence on energy firms with bearish moment despite illustrating strong profitability relative to their ROE. These were the top nine firms listed at the time this article was written, according to the criteria listed above.

Source: 9 Energy Stocks With Bearish Momentum Despite Shareholder Profitability