The energy sector traditionally included stocks operating in oil and gas, coal, and utilities such as electricity and water, and it now comprises renewable companies too.
Energy sector stocks cover companies exploring, refining, marketing, and distributing fossil fuels, renewable energy sources, and non-renewable resources such as Uranium. It also includes companies servicing these markets and the manufacture of energy-related equipment.
Investors have been swarming to Environmental, Social, and Corporate Governance (ESG) and renewable stocks in droves. But many analysts and company executives alike see the world facing a growing need for hydrocarbons for a long time to come.
During the crazy lows and momentum-driven highs of 2020, the energy sector enjoyed a share price run as oil and natural gas prices soared. Now things are settling down, and some investors are pulling out of energy to seek their fortunes elsewhere.
Q4 2021 Energy momentum stocks
Momentum refers to the speed or rate of change in stock price. Healthy price trends tend to exhibit strong momentum, and price weakens when momentum subsides. The following stocks have been enjoying a rise in momentum in recent weeks. Can their streak continue in Q4?
Spartan Delta (TSX: SDE)
Spartan Delta Corp. engages in the exploration, development, and production of petroleum and natural gas properties in Western Canada. It also owns and operates oil and gas properties in Alberta, Saskatchewan, and British Columbia. As of December 31, 2020, company-owned total proved plus probable reserves of 206,942 thousand barrels of oil equivalent. The company was formerly known as Return Energy Inc. and changed its name to Spartan Delta Corp. in May 2020. Spartan Delta Corp. was incorporated in 2006 and is headquartered in Calgary, Canada.
Spartan Delta has a price to earnings ratio (P/E) of 5.5, and its Price/Book value is 1.8x. The SDE share price has risen 114% in the past year.
SDE has a 3-year Compound Annual Growth Rate (CAGR) for Sales of 252%. Its sales growth for its latest interim period vs. the prior period is 582%.
Analyst estimates indicate a buy with a 12-month average target price of $9.06 and a potential 72% upside.
Travelcenters Of America Inc (NASDAQ: TA)
TravelCenters of America operates travel centers and standalone restaurants in the United States and Canada. Its travel centers offer a range of products and services, including diesel fuel and gasoline, diesel exhaust fluid, truck repair and maintenance, roadside services, and operates full service and quick service restaurants and various customer amenities.
Additionally, the company operates restaurants under a franchise agreement. As of April 2021, it operated 273 travel centers under the TravelCenters of America, TA, TA Express, Petro Stopping Centers, and Petro brand names plus the Quaker Steak & Lube, or QSL, Iron Skillet, and Country Pride brand names; and three standalone truck service facilities under the TA Truck Service brand name.
TravelCenters of America serves trucking fleets and their drivers, independent truck drivers, highway and local motorists, and casual diners.
TA has a P/E of 28, and its Price/Book value is 1.1x. The TA share price has risen 155% in the past year. TA stock appears in 31 ETFs.
TravelCenters of America has a 3-year CAGR for Sales of 3%.
Analyst estimates indicate TA stock a buy with a 12-month average target price of $58.50 and a potential 17% upside.
Tourmaline Oil (TSX: TOU)
Tourmaline Oil Corp. acquires, explores for, develops, and produces oil and natural gas properties in the Western Canadian Sedimentary Basin. It holds interests in properties located in the Alberta Deep Basin, Northeast British Columbia Montney, and the Peace River High Triassic oil complex. The company was incorporated in 2008 and is headquartered in Calgary, Canada.
Tourmaline Oil has a P/E of 9.4, and its Price/Book value is 1.5x. The TOU share price has risen 168% in the past year. TOU stock appears in 26 ETFs.
Tourmaline Oil has a 3-year CAGR for Sales of 4%. Its sales growth for its latest interim period vs. the prior period is 111%.
Analyst estimates indicate TOU stock a buy with a 12-month average target price of $55.29 and a potential 28% upside.
Q4 2021 Energy growth stocks
Growth in sales and/or earnings per share indicates a business that is growing. Growth stocks can make very lucrative investments when the share price rises in time with the business expansion. But growth stocks are also risky as investment analysis is based on future price action rather than historical price performance.
Famous growth investors include Philip Fisher, T. Rowe Price, and Jim Slater.
Green Plains (NASDAQ: GPRE)
Green Plains Inc. produces, markets, and distributes ethanol in the United States and internationally. It operates through four segments: Ethanol Production, Agribusiness and Energy Services, Food and Ingredients, and Partnership.
GPRE has a forward P/E of 101, and its Price/Book value is 2x. The GPRE share price has risen 105% in the past year. Green Plains stock appears in 80 ETFs.
Its sales growth for its latest interim period vs. the prior period is 86%.
Analyst estimates indicate GPRE stock a buy with a 12-month average target price of $46 and a potential 45% upside.
TORM (NASDAQ: TRMD)
TORM plc, a product tanker company, engages in the transportation of refined oil products and crude oil worldwide. The company transports gasoline, jet fuel, naphtha, and diesel. As of March 1, 2021, it operated a fleet of approximately 80 vessels. The company was founded in 1889 and is based in London, the United Kingdom.
TORM has a forward P/E of 9, and its Price/Book value is 0.6x. The TORM share price has risen 105% in the past year. TRMD stock appears in 15 ETFs.
TORM has a 3-year CAGR for Sales of 4.3% and EPS of 221%.
Its sales growth for its latest interim period vs. the prior period is -33%.
Analyst estimates indicate TRMD stock a buy with a 12-month average target price of $12 and a potential 57% upside.
DHT Holdings (NYSE: DHT)
DHT Holdings, Inc. is an independent crude oil tanker company. The company’s fleet trades internationally and consists of 27 crude oil tankers in the gigantic crude carrier (VLCC) segment. The company has all functions in-house and operates through integrated management companies in Monaco, Singapore, and Oslo, Norway.
DHT has a P/E of 15, and its Price/Book value is 1x. The DHT share price has risen 22% in the past year. DHT Holdings stock appears in 26 ETFs.
DHT Holdings has a 3-year CAGR for Sales of 24% and EPS of 122%.
Its sales growth for its latest interim period vs. the prior period is -73%.
Analyst estimates indicate a buy with a 12-month average target price of $7.46 and a potential 18% upside.
Q4 2021 Energy value stocks
Value investing is a prevalent type of stock market investing advocated by Billionaire investor Warren Buffett. When growth stocks are in favor, value stocks tend to be less popular and vice versa. Value stocks should be trading for less than their intrinsic or book value.
Daqo New Energy Corp (NYSE: DQ)
Daqo New Energy, together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufactures in the People’s Republic of China. This is for use in solar panels.
Some investors are wary of investing in China just now due to regulatory crackdowns. But for those willing to take the risk, there may be value stock bargains to be found.
Daqo has a P/E of 9.7, and its Price/Book value is 3.5x. The DQ share price has risen 93% in the past year. DQ stock appears in 52 ETFs.
Daqo New Energy Corp has a 3-year CAGR for Sales of 27%.
Its sales growth for its latest interim period vs. the prior period is 230%.
Analyst estimates indicate DQ a buy with a 12-month average target price of $100 and a potential 91% upside.
Parex Resources Inc (TSX: PXT)
Parex Resources Inc. engages in the exploration, development, production, and marketing of oil and natural gas in Colombia. The company holds interests in onshore exploration and production blocks. As of December 31, 2020, it had proved plus probable reserves of 194,491 million barrels of oil equivalent. The company was incorporated in 2009 and is headquartered in Calgary, Canada.
Parex has a P/E of 11, and its Price/Book value is 1.7x. The PXT share price has risen 63.5% in the past year. Parex Resources stock appears in 22 ETFs.
Parex Resources has a 3-year CAGR for Sales of 1%. Its sales growth for its latest interim period vs. the prior period is 191%.
Analyst estimates indicate a buy with a 12-month average target price of $33.02 and a potential 43% upside.
Rex American Resources (NYSE: REX)
REX American Resources Corporation, together with its subsidiaries, produces and sells ethanol in the United States. It operates in two segments, Ethanol and By-Products and Refined Coal. The company also offers distillers grains and non-food grade corn oil; and dry distillers grains with solubles, which is used as a protein in animal feed. In addition, it produces, processes, and sells refined coal.
REX has a P/E of 17.1, and its Price/Book value is 1.2x. The REX share price has risen 21% in the past year. REX stock appears in 51 ETFs.
Its sales growth for its latest interim period vs. the prior period is 397%.
Analyst estimates indicate a buy with a 12-month average target price of $100 and a potential 25% upside.
The stocks in this article were selected based on quantified analysis. This can give investors sector insight and a starting point from which to make investment decisions. This should not be construed as financial advice.
