A small oil services firm, TETRA Technologies (TTI) recently popped up on my radar. This cheap energy play has picked up several positive catalysts recently and looks poised to head higher.
Recent positives for TTI:
- Wunderlich just initiated the shares as a "Buy" and put a $10 price target on TETRA.
- Insiders have been active buyers recently. Numerous insiders made purchases since May, including a $165K buy by the CEO in early August.
- The stock has put in a solid bottom at these levels over the past few months (See Chart).
(click to enlarge)
"TETRA Technologies operates as a diversified oil and gas services company. The company operates in three divisions: Fluids, Production Enhancement, and Offshore." (Business description from Yahoo Finance)
4 additional reasons TTI could have significant upside from $6.50 a share:
- The seven analysts that follow the stock have a $11 a share price target on the stock, more than 50% above the current stock price.
- The stock is selling near the bottom of its five year valuation range based on P/B, P/S and P/CF. The company is selling at just 94% of book value.
- TTI is selling at just 7.6 times forward earnings, a discount to its five year average (12.5).
- The stock is priced with a five year projected PEG of under 1 (.72), analysts expect 15% revenue growth in FY2013 and consensus earnings estimates for 2013 fiscal year have ticked up over the last month.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TTI over the next 72 hours.
