Analysts Believe This Fast Growing Energy Concern Has At Least 50% Upside

Jul.15.12 | About: Whiting Petroleum (WLL)

Energy stocks continue to be volatile and have had a rough few months on declining oil prices and the continued low price for natural gas. However, lots of stocks in the space are offering investors great long term entry points. One cheap stock that is way below analysts' price targets and has great long lived assets is Whiting Petroleum (WLL).

"Whiting Petroleum Corporation , an independent oil and gas company, engages in the acquisition, development, exploitation, exploration, and production of oil and gas primarily in the Permian Basin, Rocky Mountains, Mid-Continent, Gulf Coast, and Michigan regions of the United States" (Business description from Yahoo Finance)

6 reasons WLL has long term value at just $40 a share:

  1. The 30 analysts that cover the stock have a $65 median price target on the stock. Both Macquarie and Wunderlich have upgraded the stock to a "buy" or "outperform" in the last six weeks. Credit Suisse has an "outperform" rating and an $83 price target on WLL.
  2. The stock is selling at 9.5 times forward earnings, a significant discount to its five year average (16.4). The company has grown earnings at over a 19% annual clip over the past five years.
  3. The company has 14 years of proven reserves at current production rates and 86% of its reserves are oil based.
  4. Analysts expect double digit revenue growth in both FY2012 and FY2013 and the stock has a low five year projected PEG (.64).
  5. WLL is selling near the bottom of its five year valuation ranged based on P/B, P/E, P/S and P/CF.
  6. The stock looks like it is trying to form a bottom here (See Chart).

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Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in WLL over the next 72 hours.