With oil falling to its lowest level since February last week, investors have been abandoning the energy sector in droves. A number of major energy companies are now trading well beneath their 52-week highs and in some cases even look undervalued or oversold. Given its volatility many investors are choosing to shy away from the sector entirely, leaving those with more of a taste for risk plenty of room to lap up remaining opportunities. Among the stocks that have show promise are Kinder Morgan Inc (KMI)., Range Resources (RRC) and Chevron.
Kinder Morgan, Inc. (KMI) focuses on pipeline transportation and energy storage in North America with over 37,000 miles of pipeline and 180 terminals at its disposal. Kinder’s piplines transport a variety of resources from crude oil to gasoline, natural gas and C02 while its terminals store petroleum products and other entities like ethanol, coal and steel. The diversity of its offerings will keep Kinder Morgan more insulated from oil volatility than some of its competitors. Furthermore, the company owns the general partner interest in the publicly traded pipeline limited partnership of Kinder Morgan Energy Partners (KMP), the massive publicly traded pipeline, that brings the value of the company to around $55 billion.
Chevron Corporation (CVX)–Major oil corporations have taken a major hit in their share prices and Chevron is no exception. Through its subsidiaries, Chevron engages in petroleum, chemicals, mining, power generation and energy operations on a global lebel. The company like many majors, focuses on exploration and development of crude oil and natural gas as much as it does pipeline transportation and production. It’s a muli-faceted corporation that has in spite of the strength of its operations, has lost $10 a share over the past month and a half and is now trading for under $100. Unlike many of the tech companies that are looking more appealing in their novelty but are selling for well beyond earnings, Chevron is actually selling for 8 times beneath earning expectations for 2011 and 2012. Expectations for earnings have been boosted several times this year and look considerably more promising than the share price would indicate. Price targets for shares are as high as $130 with many others in that range.
ATP Oil and Gas (ATPG): This company is engaged in the acquisition, development and production of oil and natural gas properties in the Gulf of Mexico, the UK and Dutch sectors of the North Sea. They have had an interesting run of it with huge shifts in share prices and are currently trading significantly beneath their 52-week lows. With their current weakness but prospects for considerable growth and a history of exceeding expectations; however, ATP could still be a buy. Yesterday the company fell an additional 11percent after an announcement about the sales of shares which could mean it’s the time to snap it up on the cheap. In spite of challenges, the company runs a solid business, drawing in$438 million in revenues in 2010.
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