By |Published On: December 11th, 2014|Categories: Research Insights, Value Investing Research, Uncategorized|

I just took a snapshot of the front page of Yahoo Finance, CNBC.com, and Bloomberg.com:

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Bloomberg.com @ 1725 EST

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CNBC.com @ 1725 EST

Yahoo Finance - Business Finance, Stock Market, Quotes, News_2014-12-11_17-20-41

Finance.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
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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About the Author: Wesley Gray, PhD

Wesley Gray, PhD
After serving as a Captain in the United States Marine Corps, Dr. Gray earned an MBA and a PhD in finance from the University of Chicago where he studied under Nobel Prize Winner Eugene Fama. Next, Wes took an academic job in his wife’s hometown of Philadelphia and worked as a finance professor at Drexel University. Dr. Gray’s interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management firm dedicated to an impact mission of empowering investors through education. He is a contributor to multiple industry publications and regularly speaks to professional investor groups across the country. Wes has published multiple academic papers and four books, including Embedded (Naval Institute Press, 2009), Quantitative Value (Wiley, 2012), DIY Financial Advisor (Wiley, 2015), and Quantitative Momentum (Wiley, 2016). Dr. Gray currently resides in Palmas Del Mar Puerto Rico with his wife and three children. He recently finished the Leadville 100 ultramarathon race and promises to make better life decisions in the future.

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