Oil has rebounded from its multi-year lows reached in 2016. Currently, while the commodity may not be at the expected level, certain companies are in a position to earn profits. We cannot overlook the chances of the market moving sideways and witnessinghigh volatility.Nevertheless, many analysts are not too bearish about oil in the remainder of 2017.
While the Zacks Oil& Gas industry has lagged the S&P 500 index in the year-to-date period (the sector has lost 32.3% of its value versus the 9.2% growth of the broader index), many believe that the underperformance of energy stocks creates investing opportunities.
One such stock is Range Resources Corporation (RRC - Free Report) , an independent oil and gas company engagedin the exploration, development and acquisition of oil and gas properties mainly in the southwestern, Appalachian and Gulf Coast regions of the United States. The company’s southwestern operations include the Barnett Shale play in north central Texas, the Permian Basin in west Texas and eastern New Mexico as well as the East Texas Basin, the Texas Panhandle and the Anadarko Basin in western Oklahoma. Let us delve deeper into other factors which makes this Zacks Rank #1 (Strong Buy) stock a lucrative pick.You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings and Sale Estimate – As per the estimates of analysts polled by Zacks, earnings are expected to increase 1492.3% in 2017 over 2016 and 36.56% in 2018 over 2017.
Even the sales estimates show an upward movement for both the years 2017 and 2018 by 122.8% and 11%, respectively.
Surprise History– The company beat estimates in three of the trailing four quarters with an average positive earnings surprise of 51.82%.
Mergers -The recent merger with Memorial Resource Development Corp. is expected to substantially boost Range Resources’ position as a premier independent natural gas, oil and NGL producer in the United States. The company will hold remarkable core acreage positions in both Appalachian Basin and Northern Louisiana. Moreover, Range Resources' access to Terryville field in Louisiana and Cotton Valley, following the merger, bodes well.
Strong Leverage: Range Resources’ debt/equity ratio is 68% compared with the industry’s average of 95.6%. The relatively strong financial health of the company should help it perform better than its peers under a dynamic business environment.
Other Stocks to Consider
A few other top-ranked stocks from the same space are:
Headquartered in Calgary, Canada, TransCanada Corporation (TRP - Free Report) is a midstream energy firm in North America. The company deliveredan average positive earnings surprise of 4.06% over the last four quarters.
Transmontaigne Partners LP (TLP - Free Report) , headquartered in Denver, CO, involves in transporting and storing refined petroleum products. The firm deliveredan average positive earnings surprise of 6.60% over the last four quarters.
Headquartered in Herzliya, Israel, SolarEdge Technologies, Inc. (SEDG - Free Report) designs, develops and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in Israel, Europe, the United States, and internationally. The company delivered an average positive earnings surprise of 21.72% over the last four quarters.
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