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The shale is hot! Parker Drilling Company (PKD - Free Report) recently reported third quarter results and easily beat the Zacks Consensus Estimate by 38%. Even though shares have rallied after summer lows, this Zacks #2 Rank (buy) is still a value stock with a forward P/E of 11.9.

Parker Drilling provides contract drilling solutions, rental tools and project management to the energy industry. It has 25 land rigs and 2 offshore barge rigs in its international fleet. Its U.S. fleet consists of 13 barge rigs in the Gulf of Mexico.

The company's rental tool segment supplies equipment to operators on land and offshore in the U.S. and some international markets.

Parker Beat for the Second Quarter in a Row

On Nov 3, Parker reported its third quarter results and surprised on the Zacks Consensus Estimate by 5 cents, or 38%. Earnings per share were 18 cents compared with the consensus of just 13 cents. The company only broke even in the year ago quarter.

Revenue rose to $176.6 million from $172 million a year ago. The quarter was boosted, again, by big growth in the Rental Tools segment. Sales rose 30% to $62.4 million from $48.1 million a year ago.

Demand for drill pipe and related products, especially from operators drilling in the shale plays, continued to expand.

The level of international and deepwater Gulf of Mexico placements also increased in the quarter. U.S. Drilling revenue rose 94% to $28.9 million from $14.9 million a year ago.

For the quarter, Parker had an average of 10.7 barge rigs employed compared to about 7.6 barge rigs which were employed in the third quarter of 2010.

Zacks Consensus Estimates Rise for 2011 and 2012

Parker did not give EPS guidance but did say that its "primary markets appear to have established some momentum." With the earnings beat and the bullish sentiment, analysts have been raising estimates.

All 5 estimates for 2011 jumped in the last week, pushing the Zacks Consensus up to 53 cents from 46 cents.

That is amazing earnings growth of 560% as Parker made just 8 cents total for all of 2010.

Double digit growth is expected to continue into 2012. The 2012 Zacks Consensus has risen to 75 cents from 69 cents since the earnings report. That is further EPS growth of 43%.

Still a Value

I took a look at Parker in October 2001, before the third quarter report, and it was trading at just 9x forward estimates. It's a bit more expensive now due to the recent stock rally.

But it is still trading with a P/E under 15 and it has a price-to-book ratio of just 1.2. A P/B ratio under 3.0 usually indicates value.

Parker Drilling is a way to get in on the growth of the shale craze at a decent valuation.

This Week's Value Zacks Rank Buy Stocks

Thanks to the record WTI-Brent spread, Delek US Holdings, Inc. (DK) is riding high with earnings expected to grow over 1000% in 2011. This Zacks #1 Rank (strong buy) may face headwinds in 2012 as that spread comes back to earth. Those jitters are reflected in the incredibly low P/E, which is just 4x forward estimates. Read the full article.

The prison business is still chugging along. Corrections Corporation of America (CXW) recently surprised on the Zacks Consensus Estimate for the 12th quarter in a row. This Zacks #1 Rank (strong buy) is also a value stock with a forward P/E of 14.6. Read the full article.

The party hasn't stopped yet for the container companies. Textainer Group Holdings Limited (TGH) had near record utilization rates, again, in the third quarter and also raised its dividend for the 7th consecutive quarter. This Zacks #1 Rank (strong buy) is still cheap, with a forward P/E of just 8.7. Read the full article.

Standard Motor Products, Inc. (SMP) has put together a steady stream of earnings beats after surviving the Great Recession of 2008. Earnings are expected to grow by the double digits in 2011. This Zacks #1 Rank (strong buy) is also a value stock, with a forward P/E of 12.8. Read the full article.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at traceyryniec.

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