ValuEngine tracks more than 7000 US equities, ADRs, and foreign stock which trade on US exchanges as well as @1000 Canadian equities.  When EPS estimates are available for a given equity, our model calculates a level of mispricing or valuation percentage for that equity based on earnings estimates and what the stock should be worth if the market were totally rational and efficient–an academic exercise to be sure, but one which allows for useful comparisons between equities, sectors, and industries. Using our Valuation Model, we can currently assign a VE valuation calculation to more than 2800 stocks in our US Universe.

Market volatility has returned with a vengeance so far this year. The stock market has gone into a tailspin driven by a Chinese stock-market sell off and economic slow down, carnage in the oil markets, and the resultant uncertainty about the global economy.

Oil prices are in the gutter thanks to a big over supply and lower demand. Crude has now gone lower than $30/barrel for the first time in twelve years, and investors are watching that per barrel price very carefully. Other commodities are also suffering from price declines–and this adds further uncertainty about the global economy. But, the oil price so far this year has been closely correlated to stock prices.

Lower energy prices have been a boon to US consumers still tied to their automobiles, the trucking industry, auto manufacturers, airlines, and other companies sensitive to the price of refined crude. But, if the declining oil price is indicative of a global slow-down (eg a demand problem) then this will catch up with those industries sooner or later.

Obviously, if you are looking to buy low, oil stocks in most industries within the sector have declined significantly along with the price of crude. Oil is currently near its multi-year low. So, if you’re looking for cheap energy/oil stocks, now may be the time. For today’s bulletin we queried our systems for the various oil-related industries in the Energy Sector. We find the following data for top-five lists in various categories.

Top-Five Oil Industry Stocks–Short-Term Forecast Returns

Ticker

Name

Mkt Price

Valuation (%)

VE Rating

Last 12-M Return (%)

CVRR

CVR REFINING LP

17.38

-20.13%

5

20.69%

TSO

TESORO CORP

90.73

-21.12%

5

18.51%

NTI

NORTHERN TIER

25.32

-5.19%

5

24.00%

ALDW

ALON USA PTNRS

19.04

-2.47%

5

47.25%

VLO

VALERO ENERGY

67.86

-6.02%

5

41.38%

Top-Five Oil Industry Stocks–Most Undervalued

Ticker

Name

Mkt Price

Valuation (%)

VE Rating

Last 12-M Return (%)

ATW

ATWOOD OCEANICS

6.07

-75.00%

3

-79.44%

MCF

CONTANGO OIL&GS

4.77

-75.00%

2

-82.96%

CIE

COBALT INTL EGY

3.25

-75.00%

2

-60.89%

AROC

ARCHROCK INC

5.7

-73.63%

2

-79.78%

ETE

ENERGY TRAN EQT

9.63

-71.92%

3

-64.33%