Despite the current six-month old rally, stocks in the energy sector are still popping up on my value screens. One stock with solid valuations and superior growth prospects is below.
Superior Energy Services (NYSE:SPN) - "Superior Energy Services, Inc. provides specialized oilfield services and equipment to serve the production and drilling-related needs of oil and gas companies. It operates through three segments: Subsea and Well Enhancement, Drilling Products and Services, and Marine." (Business Description from Yahoo Finance).
7 Reasons to pick up Superior at $29 a share:
- Superior is predicted to have rapid earnings growth. The company made $2.09 in FY2011, it is expected to earn $3.31 in FY2012 and analysts project $4.02 in earnings for FY2013.
- The company has double revenue from FY2006 to FY2011. Analysts expect this growth to continue and have 17% growth in revenue tagged for FY2013.
- It is selling well below analysts' price targets. The median price target for the 12 analysts that cover the stock is $41.50. S&P has a "Buy" rating and a $38 price target on SPN.
- It has a dirt cheap five-year projected PEG (.22) and sells at just 9 times operating cash flow, which is toward the bottom of its five-year average.
- Given the projected revenue and earnings increases, a forward PE of less than 7.5 seems too cheap for this company.
- A director recently purchased around $300K of new shares, which gave the company net insider buying for the last six months.
- The stock is showing increasing technical strength and just crossed over its 100-day moving average (See Chart - click to enlarge)
- Click to enlarge
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in SPN over the next 72 hours.