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Welcome to Episode #321 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The energy stocks have sold off again as WTI oil has fallen below $70 and is now at 17-month lows. With some energy stocks at 52-week lows again, having round tripped since the Ukraine War sent oil prices soaring, could there be a buying opportunity in energy again?
Warren Buffett, and Berkshire Hathaway, has been deploying cash again in March 2023. But Berkshire isn’t buying the bank stocks, even though it owns a big position in Bank of America. It’s adding again to its big Occidental Petroleum position instead.
What does Buffett know that he’s diving in for more shares?
Where to Find Top Energy Stocks
But you don’t have to buy an oil producer like Berkshire is to get good quality energy companies. Other areas of energy have top industry ranks and are also cheap.
The Oil & Gas – Field Services industry is ranked 65 out of 249 industries. That puts it in the top 26%.
The Refining industry is ranked 19 out of 249, which puts it in the top 8% of all industries.
SLB is a global technology company that operates in the energy industry. It’s in the services industry.
Shares of SLB have fallen 13% year-to-date as crude oil has fallen. But earnings are expected to rise 38.5% in 2023 and another 25.3% in 2024. SLB has gotten cheaper in 2023, and now trades with a PEG of just 0.4.
Halliburton is one of the world’s largest providers of products and services to the energy industry.
Shares of Halliburton have fallen 21.2% in 2023. Earnings are expected to jump 43.7% in 2023. As a result, Halliburton has a dirt-cheap PEG ratio of just 0.3. A PEG under 1.0 indicates a company has both value and growth.
Halliburton pays a dividend, currently yielding 1.3%.
Is this a buying opportunity in Halliburton?
3. NexTier Oilfield Solutions
NexTier Oilfield Solutions is a US-land well-completions company. It’s a small cap, with a market cap of just $1.8 billion.
Shares of NexTier have fallen 15.8% year-to-date on the latest energy sell-off. However, earnings are expected to rise 63.3% in 2023.
NexTier trades with a forward P/E of just 3. It doesn’t pay a dividend.
Should investors be looking at small cap energy, such as NexTier, in 2023?
Marathon Petroleum is a downstream energy operator with refining, pipelines and retail through its branded Marathon service stations. It has a $54 billion market cap.
Shares of Marathon Petroleum are up 7.5% year-to-date but it still remains cheap. It has a PEG ratio of just 0.2.
Marathon Petroleum pays a dividend, currently yielding 2.4%. And as of Jan 31, 2023, it had $7.6 billion remaining on a share repurchase authorization with no expiration date.
Marathon Petroleum is a Zacks Rank #2 (Buy) stock.
Should downstream companies like Marathon Petroleum be on your watch list?
What Else do you Need to Know About Energy Stocks in 2023?
Listen to this week’s podcast to find out.
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5 Cheap Energy Stocks to Buy Now
Welcome to Episode #321 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The energy stocks have sold off again as WTI oil has fallen below $70 and is now at 17-month lows. With some energy stocks at 52-week lows again, having round tripped since the Ukraine War sent oil prices soaring, could there be a buying opportunity in energy again?
Warren Buffett, and Berkshire Hathaway, has been deploying cash again in March 2023. But Berkshire isn’t buying the bank stocks, even though it owns a big position in Bank of America. It’s adding again to its big Occidental Petroleum position instead.
What does Buffett know that he’s diving in for more shares?
Where to Find Top Energy Stocks
But you don’t have to buy an oil producer like Berkshire is to get good quality energy companies. Other areas of energy have top industry ranks and are also cheap.
The Oil & Gas – Field Services industry is ranked 65 out of 249 industries. That puts it in the top 26%.
The Refining industry is ranked 19 out of 249, which puts it in the top 8% of all industries.
5 Cheap Energy Stocks to Buy Now
1. SLB (SLB - Free Report)
SLB is a global technology company that operates in the energy industry. It’s in the services industry.
Shares of SLB have fallen 13% year-to-date as crude oil has fallen. But earnings are expected to rise 38.5% in 2023 and another 25.3% in 2024. SLB has gotten cheaper in 2023, and now trades with a PEG of just 0.4.
SLB pays a dividend, currently yielding 2.2%.
Should SLB be on your short list?
2. Halliburton (HAL - Free Report)
Halliburton is one of the world’s largest providers of products and services to the energy industry.
Shares of Halliburton have fallen 21.2% in 2023. Earnings are expected to jump 43.7% in 2023. As a result, Halliburton has a dirt-cheap PEG ratio of just 0.3. A PEG under 1.0 indicates a company has both value and growth.
Halliburton pays a dividend, currently yielding 1.3%.
Is this a buying opportunity in Halliburton?
3. NexTier Oilfield Solutions
NexTier Oilfield Solutions is a US-land well-completions company. It’s a small cap, with a market cap of just $1.8 billion.
Shares of NexTier have fallen 15.8% year-to-date on the latest energy sell-off. However, earnings are expected to rise 63.3% in 2023.
NexTier trades with a forward P/E of just 3. It doesn’t pay a dividend.
Should investors be looking at small cap energy, such as NexTier, in 2023?
4. Valero Energy (VLO - Free Report)
Valero Energy owns 15 refineries in the United States, Canada and the United Kingdom.
Shares of Valero Energy are up on the year, but just 0.2%. Shares are still dirt-cheap with a forward P/E of 5.1.
In Jan 2023, Valero Energy raised its quarterly dividend to $1.02 from $0.98, for an annualized dividend of $4.08. That’s currently yielding 3.3%.
Valero is a Zacks Rank #1 (Strong Buy).
Should a refiner like Valero be on your short list?
5. Marathon Petroleum Corp. (MPC - Free Report)
Marathon Petroleum is a downstream energy operator with refining, pipelines and retail through its branded Marathon service stations. It has a $54 billion market cap.
Shares of Marathon Petroleum are up 7.5% year-to-date but it still remains cheap. It has a PEG ratio of just 0.2.
Marathon Petroleum pays a dividend, currently yielding 2.4%. And as of Jan 31, 2023, it had $7.6 billion remaining on a share repurchase authorization with no expiration date.
Marathon Petroleum is a Zacks Rank #2 (Buy) stock.
Should downstream companies like Marathon Petroleum be on your watch list?
What Else do you Need to Know About Energy Stocks in 2023?
Listen to this week’s podcast to find out.