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Interested in oil & gas companies? Looking for undervalued stocks? Do you prefer stocks that analysts rate as "Buy", or better? For ideas on how to go about your analysis, here is a list you might be interested in.

The Price/Book Value Ratio is a great price-multiple valuation metric to find companies that could be potentially undervalued or overvalued. If a firm has a Price/Book Value Ratio of less than 1 it is stated to be trading below "break up" value. A lower P/BV Ratio can indicate a potentially mispriced company or indicate that something is fundamentally wrong with it.

The Price/Sales ratio is a price-multiple valuation metric used to help identify if a firm is cheap by its twelve month trailing sales numbers. In the most basic terms it let's an investor know how much the investment community is willing to pay for every dollars worth of sales. A firm with a P/S ratio of one or lower would be viewed as cheap because investors are paying $1 or less for every dollars worth of a firm's sales. On the other hand, a firm is generally considered to be expensive when the P/S ratio is above three. These are general guidelines used by the investment community not hard rules to be clear. Price/Sales Ratio = Current Stock Price/Revenue (sales) per Share

We first looked for oil & gas stocks. We then screened for businesses that are undervalued (P/BV<1)(P/S<1). We next screened for businesses that analysts rate as "Buy" or "Strong Buy" (mean recommendation < 3). We did not screen out any market caps.

Do you think these stocks have a positive future in store? Use our list along with your own analysis.

1) WPX Energy Incorporated (NYSE:WPX)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$3.29B
Beta:-

WPX Energy Incorporated has a Price/Book Value Ratio of 0.58 and Price/Sales Ratio of 0.86 and Analysts' Rating of 2.30. The short interest was 2.74% as of 05/23/2012. WPX Energy, Inc., an independent natural gas and oil exploration and production company, engages in the exploitation and development of long-life unconventional properties. Its principal areas of operation are the Piceance Basin, Bakken Shale, Marcellus Shale, Powder River Basin, and San Juan Basin in the United States, as well as through its ownership of Apco Oil and Gas International Inc.

2) Double Eagle Petroleum Co. (NASDAQ:DBLE)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$50.80M
Beta:1.72

Double Eagle Petroleum Co. has a Price/Book Value Ratio of 0.54 and Price/Sales Ratio of 0.76 and Analysts' Rating of 2.00. The short interest was 2.38% as of 05/23/2012. Double Eagle Petroleum Co., an independent energy company, engages in the exploration, development, production, and sale of natural gas and crude oil primarily in the Rocky Mountain Basins of the western United States. The company's properties include the Atlantic Rim coal bed natural gas project located in south central Wyoming; the Pinedale Anticline in the Green River Basin of Wyoming; and the Wind River Basin in central Wyoming, as well as engages in drilling activities in the Moxa Arch and other areas in Southwest Wyoming. It also operates 91 producing wells in the state of Wyoming, 4 wells in Texas, and 1 well in Oklahoma; and transports gas through intrastate gas pipeline.

3) Crosstex Energy LP (XTEX)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$811.39M
Beta:1.32

Crosstex Energy LP has a Price/Book Value Ratio of 0.93 and Price/Sales Ratio of 0.43 and Analysts' Rating of 2.10. The short interest was 2.11% as of 05/23/2012. Crosstex Energy, L.P. operates as an independent midstream energy company.

4) Penn Virginia Corporation (NYSE:PVA)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$264.44M
Beta:1.53

Penn Virginia Corporation has a Price/Book Value Ratio of 0.32 and Price/Sales Ratio of 0.82 and Analysts' Rating of 2.20. The short interest was 9.63% as of 05/23/2012. Penn Virginia Corporation, an independent oil and gas company, primarily engages in the exploration and development of natural gas and oil properties in various onshore regions of the United States. The company is involved in the production and sale of natural gas, crude oil, and natural gas liquid products. It primarily focuses on developing the Eagle Ford Shale play in south Texas; and the horizontal Granite Wash play in the Mid-Continent region.

5) Chesapeake Energy Corporation (NYSE:CHK)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$9.99B
Beta:1.30

Chesapeake Energy Corporation has a Price/Book Value Ratio of 0.60 and Price/Sales Ratio of 0.80 and Analysts' Rating of 2.40. The short interest was 10.23% as of 05/23/2012. Chesapeake Energy Corporation engages in the acquisition, exploration, development, and production of natural gas and oil properties in the United States. The company also offers marketing, midstream, drilling, and other oilfield services. It holds interests in various natural gas resources, including the Haynesville and Bossier Shales in northwestern Louisiana and East Texas; the Marcellus Shale in the northern Appalachian Basin of West Virginia and Pennsylvania; the Barnett Shale in the Fort Worth Basin of north-central Texas; and the Pearsall Shale in South Texas.

*Company profiles were sourced from Finviz.

Source: 5 Oil And Gas Stocks Undervalued By EPS Trends But Rated As Buy Or Better By Analysts