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Tickers in this Article: TOT, APC, DVN
Yes, the price of crude is down from its recent highs; however, even with crude pulling back to recent levels the profit margins for oil companies should continue to be very impressive. There are many great long term buys that the market has created for us in the sector. By focusing on the long term fundamentals we can see the trees beyond the forest.

Some attractive crude stocks that come up on the radar are: Total S.A. (NYSE:TOT) Anadarko Petroleum (NYSE:APC) and Devon Energy (NYSE:DVN).

Total shows Promise
With the market chaos, shares of Total are looking very attractive. The company is currently trading at a forward P/E of 6. It is currently paying an great dividend of $2.69 or 5.5%. As a sign of financial strength, it has a history of paying and raising its dividend going back to 1992. What all this means is that from an investor's perspective, Total could be an outstanding long term candidate. Shares could remain volatile over the short term while many are concerned about what is happening with the markets, but for those of you who want to take advantage of the recent weakness, Total is ideal. For those of you who want to wait until the new numbers to come out, the next earnings report is scheduled for November 5, 2008. (Find out what to look out for when trading during market instability in Tips For Investors In Volatile Markets.)

Anadarko Petroleum looks Cheap
Shares of Anadarko Petroleum continued their slide this week. The big question is: are shares attractively valued or is this just another valuation trap? Anadarko is currently trading at a forward P/E of 8. Over the past four quarters the company beat the analyst earnings per share estimates. And the stock is at levels not seen since 2004. When you put all the facts together we have a long term situation that perhaps the overall markets have punished Anadarko more than necessary. For those who are looking for a good long term valuation area Anadarko is worth some serious consideration.

Devon Energy a Great Value
Shares of Devon Energy are looking very attractive at current levels. The stock is currently trading at a forward P/E of 7.5. Analysts are generally bullish on the stock with the four most recent ratings changes being positive ones. As they sit now the ratings are 'overweight' by JPMorgan, an initiated 'market perform' by BMO Capital Markets, and 'buy' from Argus. The most recent change came from Oppenheimer when it upgraded its rating to 'outperform' from 'perform' on October 20, 2008. (For more on what ratings can mean for a stock, read Stock Ratings: The Good, The Bad And The Ugly.)

The markets have brought the price of Devon to very reasonable level. Even though prices of crude have come down, they are still high enough that earnings will continue to remain strong. Also the ratings upgrades show that when the attractive valuations are available, Wall Street Analysts will respond. For those who are looking for a good long term valuation in the oil drilling area Devon Energy is worth a look.

Bottom Line
Right now there are some great valuations to be had, and even the major oil companies are providing some of the most compelling stories. While shares could remain volatile over the short term, over the long term it is only a matter of time until the markets realize the attractive valuations and strong earnings. When this happens, those long-term investors who had the courage to take positions in these companies might be rewarded.

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