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Don't write off oil & gas stocks as too risky in the current market. With the right analysis, there are opportunities that beg for further exploration. Today, we reviewed companies that appear undervalued from a price-multiple perspective. Among these companies, we selected those that have the strongest projected growth. The following is a short list of attractive stocks.

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.

The Price/Book Value Ratio (P/BV ratio) is a great price-multiple valuation metric to find companies that could be potentially undervalued or overvalued. If a firm has a P/BV 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/Earnings ratio is one of the most commonly used price-multiple metrics. Often, EPS from the last four quarters is used to derive this number. A firm that has a high P/E ratio generally indicates that investors have high expectations of the firm relative to future earnings growth. By the opposite token, investors generally have lower expectations of a firm with a low P/E ratio. A firm that holds a P/E below 10 could be viewed as having "value investment" potential. One thing to remember is that EPS is an accounting measure that could be potentially manipulated. Thus the P/E is only as good as the quality of the earnings.

We first looked for oil and gas stocks. We then screened for businesses that are considered high-growth, with 1-year projected EPS growth above 25%. From here, we then looked for companies that are undervalued from a price-multiple valuation standpoint (P/BV<1)(P/E<10). We did not screen out any market caps.

Do you think these stocks are undervalued and should be trading higher? Please use our list to assist with your own analysis.

1) Callon Petroleum Co. (NYSE:CPE)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$181.42M
Beta:2.46

Callon Petroleum Co. has a 1-Year Projected Earnings Per Share Growth Rate of 373.33%, a Price/Book Value Ratio of 0.91, and a Price/Earnings Ratio of 1.83. The short interest was 3.87% as of 07/25/2012. Callon Petroleum Company engages in the acquisition, exploration, development, and production of crude oil and natural gas properties. The company's properties are located in the Permian Basin in West Texas; the Haynesville Shale in northern Louisiana; and the Gulf of Mexico.

2) Warren Resources, Inc. (NASDAQ:WRES)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$151.27M
Beta:2.79

Warren Resources, Inc. has a 1-Year Projected Earnings Per Share Growth Rate of 53.57%, a Price/Book Value Ratio of 0.84, and a Price/Earnings Ratio of 5.86. The short interest was 3.64% as of 07/25/2012. Warren Resources, Inc., an independent energy company, engages in the exploration, development, and production of onshore oil and natural gas reserves in the United States. It focuses primarily on its waterflood oil recovery programs and horizontal drilling in the Wilmington field within the Los Angeles Basin of California; and on the exploration and development of coalbed methane properties located in the Rocky Mountain region. As of March 31, 2012, the company owned oil and natural gas leasehold interests in approximately 69,641 net acres located in the Rocky Mountains.

3) Chesapeake Energy Corporation (NYSE:CHK)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$11.14B
Beta:1.27

Chesapeake Energy Corporation has a 1-Year Projected Earnings Per Share Growth Rate of 346.88%, a Price/Book Value Ratio of 0.67, and a Price/Earnings Ratio of 6.95. The short interest was 13.06% as of 07/25/2012. 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.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 3 Underpriced Oil & Gas Stocks That Are Growing Fast