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Complete Production Services

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Complete Production Services (CPX) may have fallen out of favor with the market, but if you are looking for a steal this Zacks #1 Rank (Strong Buy) is a great option.

Estimates are rising despite economic worries, which have led to great valuations and should result in fantastic gains.

Company Description

Complete Production Services provides completion and production services for oil and gas wells, mainly in unconventional areas of North America.

Better than Expected Quarter

On Jul 22 the company reported an 11% increase in second-quarter revenues, to $552 million. That marks a company record and led to an earnings surprise.

EPS came in at $0.69, which was a nickel better than the Zacks Consensus Estimate. Complete Production Services has now topped forecast in 6 of the past 8 quarters.

Excellent Growth

After the news hit the wire, analysts began raising forecast for the rest of 2011 and 2012. This year's average estimate is up 15 cents, to $2.85. Next year's Zacks Consensus Estimate is up 50 cents, to $3.89.

In 2010 Complete Production Services earned $1.08 per share, so the current estimates are projecting a 163% growth rate this year and another 37% next year.

Big Discount

Fear of a double-dip recession seized the market in August and few sectors were hit like energy. But, if you are looking for a good chance to get in on a great long-term play, this dip has opened up a slew of opportunities.

CPX is trading at 10 times forward estimates thanks to rampant selling. The PEG ratio is right around 0.7 times, showing a great discount.

Huge Divergence

Read all you want into the economic indicators, but the long-term performance of a stock ultimately is driven by its earnings. You can see that the EPS projections for CPX are almost off the charts. Over time that divergence should correct and given the outlook, it is likely to be an increase in price rather than a decrease in estimates.

Complete Production Services   - ticker CPX>

Bill Wilton is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the Zacks Small Cap Trader service

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