Zacks Rank Aggressive Growth Buys

Occidental Petroleum Corp. (OXY - Analyst Report) has been scooping up big gains as the company continues to leverage its financial strength to exploit its vast pool of natural resources. The company's stock price is surging in tandem with rising estimates, but even at these levels, still looks like a bargain, trading with a P/E multiple of less than 10X.

Occidental Petroleum Corp. is an energy exploration, production and distribution company operating both domestically and internationally. The company was founded in 1920, carries a market cap. of $74.5 billion and is headquartered in Los Angeles.

Occidental has been scooping up big gains over the last six months as oil prices continue to advance. The company is set to report its second-quarter results on July 24, and if its first-quarter results, reported on Apr 24 are an indication, investors should be pleased.

Very Impressive First-Quarter Results

Net income totaled $1.846 billion, more than a 50% jump from last year's total of $1.212 billion. This produced earnings of $2.23 per share, safely ahead of analyst estimates of $1.94 per share.

This marks the fourth time in four quarters that Occidental has surprised and beaten analyst estimates, having done so by an average of 14 cents, or 9.35%.

Estimates Are Rising

Analyst earnings estimates for OXY continue to rise in conjunction with higher oil and natural gas prices. The current-year estimate has advanced to $9.44 from $6.91 just 90 days ago, a testament to the earnings strength in the red-hot energy sector.

Based upon this projection, shares of OXY actually look cheap, trading with a forward P/E multiple of less than 10X, a steep discount to the overall market.

The Chart

This stock has already had a great year, recently topping off at over $100 per share, a sharp gain from its opening price of around $80. Recently, shares have rebounded after temporarily dipping lower, setting the stage for more gains. Take a look at the chart below.