5 Value Stocks To Watch In The Energy Sector

Understanding Value Stocks

A value stock traditionally has a lower price when compared to stock prices of companies in the same industry. This indicates that the company may be undervalued, as investors are not expressing as much interest in such companies. The most commonly used way to check for value is with the price-to-earnings multiple, or P/E. A low P/E multiple is a good indication that the stock is undervalued.

The following stocks are considered to be notable value stocks in the energy sector:

1. Antero Resources AR - P/E: 6.12
2. Overseas Shipholding Gr OSG - P/E: 7.94
3. Chesapeake Energy CHK - P/E: 2.08
4. KLX Energy Services Hldgs KLXE - P/E: 3.15
5. SandRidge Energy SD - P/E: 3.03

Most recently, Antero Resources reported earnings per share at $-0.28, whereas in Q1 earnings per share sat at $0.5. Overseas Shipholding Gr saw an increase in earnings per share from 0.14 in Q1 to $0.15 now. Chesapeake Energy saw a decrease in earnings per share from 1.87 in Q1 to $0.64 now. KLX Energy Services Hldgs's earnings per share for Q2 sits at $0.81, whereas in Q1, they were at 0.8. This quarter, SandRidge Energy experienced a decrease in earnings per share, which was $0.69 in Q1 and is now $0.38.

The Significance: A value stock may need some time to rebound from its undervalued position. The risk of investing in a value stock is that this emergence may never materialize.