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3 Energy Stocks Under $5 With Strong Value Fundamentals
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Key Takeaways
Oil prices posted their first weekly gain in three weeks after a sharp inventory drawdown.
Geopolitical tensions and weak German data keep oil market uncertainty elevated.
REI, RES and KOS trade under $5 with Value Score A, offering potential in volatile markets.
Following a volatile period, oil prices have stabilized and posted their first weekly gains in three weeks. Brent crude settled at $67.73 a barrel while U.S. WTI settled at $63.66 a barrel. This price movement was primarily driven by a larger-than-expected drawdown in U.S. crude inventories, which signaled strong demand. However, the market's trajectory remains uncertain due to the prevailing geopolitical risks. News surrounding the stalled Russia-Ukraine peace talks and the possibility of new sanctions on Russian oil supplies has injected a renewed sense of risk premium back into the market, keeping traders on edge.
Other factors influencing the market include weak economic data from Germany, which raised concerns about global consumption, and anticipation of signals from the Federal Reserve's Jackson Hole conference. A potential interest rate cut could stimulate economic growth and boost oil demand. Despite these fluctuating conditions, the oil/energy market appears to be finding a more stable footing.
Given this backdrop, investors should look for undervalued energy stocks that can capitalize on market volatility while limiting downside risk. Stocks trading under $5, often called “penny stocks,” can present such opportunities, although they come with heightened risk and price swings. To help mitigate this, we have identified three Zacks Rank #3 (Hold) stocks with solid fundamentals: Ring Energy ((REI - Free Report) ), RPC, Inc. ((RES - Free Report) ) and Kosmos Energy ((KOS - Free Report) ). These companies also hold a Value Score of A, offering an additional incentive for investors amid the prevailing market uncertainty.
Ring Energy: It is an independent exploration and production company focused on oil and natural gas development in the prolific Permian Basin of Texas. Its core operations lie in the Central Basin Platform and Delaware Basin, where the company operates nearly all of its acreage. This high level of control allows Ring to adapt capital spending quickly to well performance and changing commodity prices, enhancing operational flexibility in a cyclical industry.
The company applies modern drilling and completion techniques to conventional assets, creating wells with long lives, shallow declines and attractive margins. With low breakeven costs and a portfolio that is highly oil-weighted, Ring has built a stable production base supported by efficient operations. Its strategy emphasizes predictable growth, strong cash flow generation, and disciplined capital allocation, positioning the company as a resilient player in U.S. shale development.
At less than $1 per share, REI presents an appealing option for energy sector investors looking for a stock with a reasonable valuation. Over the past 60 days, the Zacks Consensus Estimate for the company’s 2025 earnings has gone up 50%.
RPC, Inc.: It is a U.S.-based oilfield services provider offering a wide portfolio of equipment and solutions to exploration and production companies. Its operations span pressure pumping, coiled tubing, downhole tools, wireline, and rental equipment, serving key domestic regions such as the Permian Basin, Appalachia, and the Gulf Coast, with a selective international presence. The company operates through subsidiaries like Cudd Energy Services, Thru Tubing Solutions, Pintail Completions, and Patterson Services.
Known for its disciplined financial approach, RPC carries a debt-free balance sheet and has consistently returned excess free cash to shareholders. The firm has steadily expanded its service mix, most recently through the acquisition of Pintail, adding wireline capabilities. With a track record of resilience in a cyclical industry, RPC leverages diversification and capital discipline to support customers while driving long-term value creation.
RES shares trade for less than $5 as of this writing. An incredible bargain for investors, the Zacks Consensus Estimate for 2025 revenues of RES indicates 7.8% growth.
Kosmos Energy: Kosmos Energy is a deepwater exploration and production company with a balanced portfolio of oil and natural gas assets across proven basins. Its operations span offshore Ghana, Equatorial Guinea, and the U.S. Gulf of Mexico, complemented by world-scale gas developments offshore Mauritania and Senegal. The company pursues a mix of long-cycle gas projects, meeting rising global demand, and shorter-cycle oil opportunities that generate strong returns at current prices.
With a stable production base and strategic partnerships, Kosmos emphasizes disciplined growth, balance sheet resilience, and sustainable cash generation. Recent milestones, including first gas at its flagship LNG project, have positioned the business to deliver meaningful free cash flow for years ahead. By combining infrastructure-led exploration with phased project development, Kosmos seeks to minimize risk, optimize costs, and advance value creation while supporting the broader energy transition.
With a share price of just $1.84, Kosmos Energy is a stock that energy sector investors should consider for their watchlist. Over the past 60 days, the Zacks Consensus Estimate for the company’s 2025 earnings has gone up 26%.
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3 Energy Stocks Under $5 With Strong Value Fundamentals
Key Takeaways
Following a volatile period, oil prices have stabilized and posted their first weekly gains in three weeks. Brent crude settled at $67.73 a barrel while U.S. WTI settled at $63.66 a barrel. This price movement was primarily driven by a larger-than-expected drawdown in U.S. crude inventories, which signaled strong demand. However, the market's trajectory remains uncertain due to the prevailing geopolitical risks. News surrounding the stalled Russia-Ukraine peace talks and the possibility of new sanctions on Russian oil supplies has injected a renewed sense of risk premium back into the market, keeping traders on edge.
Other factors influencing the market include weak economic data from Germany, which raised concerns about global consumption, and anticipation of signals from the Federal Reserve's Jackson Hole conference. A potential interest rate cut could stimulate economic growth and boost oil demand. Despite these fluctuating conditions, the oil/energy market appears to be finding a more stable footing.
Given this backdrop, investors should look for undervalued energy stocks that can capitalize on market volatility while limiting downside risk. Stocks trading under $5, often called “penny stocks,” can present such opportunities, although they come with heightened risk and price swings. To help mitigate this, we have identified three Zacks Rank #3 (Hold) stocks with solid fundamentals: Ring Energy ((REI - Free Report) ), RPC, Inc. ((RES - Free Report) ) and Kosmos Energy ((KOS - Free Report) ). These companies also hold a Value Score of A, offering an additional incentive for investors amid the prevailing market uncertainty.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ring Energy: It is an independent exploration and production company focused on oil and natural gas development in the prolific Permian Basin of Texas. Its core operations lie in the Central Basin Platform and Delaware Basin, where the company operates nearly all of its acreage. This high level of control allows Ring to adapt capital spending quickly to well performance and changing commodity prices, enhancing operational flexibility in a cyclical industry.
The company applies modern drilling and completion techniques to conventional assets, creating wells with long lives, shallow declines and attractive margins. With low breakeven costs and a portfolio that is highly oil-weighted, Ring has built a stable production base supported by efficient operations. Its strategy emphasizes predictable growth, strong cash flow generation, and disciplined capital allocation, positioning the company as a resilient player in U.S. shale development.
At less than $1 per share, REI presents an appealing option for energy sector investors looking for a stock with a reasonable valuation. Over the past 60 days, the Zacks Consensus Estimate for the company’s 2025 earnings has gone up 50%.
RPC, Inc.: It is a U.S.-based oilfield services provider offering a wide portfolio of equipment and solutions to exploration and production companies. Its operations span pressure pumping, coiled tubing, downhole tools, wireline, and rental equipment, serving key domestic regions such as the Permian Basin, Appalachia, and the Gulf Coast, with a selective international presence. The company operates through subsidiaries like Cudd Energy Services, Thru Tubing Solutions, Pintail Completions, and Patterson Services.
Known for its disciplined financial approach, RPC carries a debt-free balance sheet and has consistently returned excess free cash to shareholders. The firm has steadily expanded its service mix, most recently through the acquisition of Pintail, adding wireline capabilities. With a track record of resilience in a cyclical industry, RPC leverages diversification and capital discipline to support customers while driving long-term value creation.
RES shares trade for less than $5 as of this writing. An incredible bargain for investors, the Zacks Consensus Estimate for 2025 revenues of RES indicates 7.8% growth.
Kosmos Energy: Kosmos Energy is a deepwater exploration and production company with a balanced portfolio of oil and natural gas assets across proven basins. Its operations span offshore Ghana, Equatorial Guinea, and the U.S. Gulf of Mexico, complemented by world-scale gas developments offshore Mauritania and Senegal. The company pursues a mix of long-cycle gas projects, meeting rising global demand, and shorter-cycle oil opportunities that generate strong returns at current prices.
With a stable production base and strategic partnerships, Kosmos emphasizes disciplined growth, balance sheet resilience, and sustainable cash generation. Recent milestones, including first gas at its flagship LNG project, have positioned the business to deliver meaningful free cash flow for years ahead. By combining infrastructure-led exploration with phased project development, Kosmos seeks to minimize risk, optimize costs, and advance value creation while supporting the broader energy transition.
With a share price of just $1.84, Kosmos Energy is a stock that energy sector investors should consider for their watchlist. Over the past 60 days, the Zacks Consensus Estimate for the company’s 2025 earnings has gone up 26%.