By Wesley R. Gray, Ph.D., AlphaArchitect, Author, Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors
I just took a snapshot of the front page of Yahoo Finance, CNBC.com, and Bloomberg.com:
Bloomberg.com @ 1725 EST
CNBC.com @ 1725 ESTFinance.Yahoo.com @ 1725 EST
WHO WOULD EVER BUY AN OIL STOCK???
Apparently, nobody.
Energy companies as a whole have been blowing up left and right and now sell at a decent discount to the market.
Oil specific names are getting killed and they are also getting cheap (at least on an enterprise multiple basis).
Of course, cheap things can get a lot cheaper. Nonetheless, the long-term track record of buying cheap stuff is pretty clear (or here).
Here are the Top 10 cheapest energy names that are at least $2B in market cap (many have a large exposure to oil):
| Ticker | Name | EBIT/TEV Yield | Percentile Cheapness Rank |
| PBF US Equity | PBF ENERGY INC-CLASS A | 22.26% | 99.90% |
| VLO US Equity | VALERO ENERGY CORP | 20.98% | 99.80% |
| RIG US Equity | TRANSOCEAN LTD | 18.16% | 99.70% |
| SM US Equity | SM ENERGY CO | 17.22% | 99.50% |
| OIS US Equity | OIL STATES INTERNATIONAL INC | 16.72% | 99.40% |
| HP US Equity | HELMERICH & PAYNE | 16.29% | 99.20% |
| IOC US Equity | INTEROIL CORP | 15.61% | 98.70% |
| WNR US Equity | WESTERN REFINING INC | 14.85% | 98.10% |
| OXY US Equity | OCCIDENTAL PETROLEUM CORP | 14.17% | 97.70% |
| NOV US Equity | NATIONAL OILWELL VARCO INC | 14.13% | 97.70% |
If you’re a value investor, this should be exciting–not scary…
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