One of the energy stocks in my portfolio, Superior Energy Services (SPN), has performed much better lately. This cheap oil services firm has also picked up some positive catalysts that should continue to push the shares higher.
Recent positives for Superior:
- Williams Financial Group just initiated the shares as "Buy" with a price target of $30 a share this week.
- The CEO has purchased some $300K in new shares over the last six months.
- After falling for months, consensus earnings estimates for both FY2012 and FY2013 have stabilized and remained the same as they were a month ago, $2.83 a share in FY2012 and $2.71 in FY2013.
"Superior Energy Services 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)
4 additional reasons SPN is undervalued at under $24 a share:
- The stock is selling near the bottom of its five year valuation range based on P/E, P/B and P/CF.
- SPN is selling at less than 9 times forward earnings, a discount to its five year average (11.6).
- The stock is cheap at 92% of book value and a minuscule five year projected PEG (.42).
- The company has more than doubled its operating cash flow in the last three years and the stock sells for less than 6 times OCF.