5 Energy Stocks to Buy Near 52-Week Lows

"Buy when there's blood in the street."

- Legendary 18th century British nobleman and member of the Rothschild banking dynasty Baron Rothschild, in reference to buying assets when everyone is selling.

At a time when oil prices have declined sharply over renewed glut fears, it also represents an opportunity to make a killing by acquiring good stocks at today’s depressed prices.

Oil Hits a Road Bump on Concerns Over U.S. Production Growth

After a strong rally in 2016 that saw prices jump more than 100% to around $54-a-barrel, oil has encountered a speed breaker this year.

For the first two months of 2017, oil prices found themselves locked in a sideways trading range, as the tug-of-war over two powerful, opposing supply narratives continue.

Reports indicated an impressive 90% compliance level from the OPEC producers who pledged output cuts in an effort to tackle the three-year supply glut. However, a burgeoning rig count – pointing to the ever-increasing shale drilling activities – kept prices under check and within a band between $50-$55 a barrel.

And then prices broke below the psychologically important $50 threshold after U.S. government data showed that supplies – building since the beginning of the year – rose to record levels amid an increase in production. At 533.11 million barrels, current crude supplies are up 6% from the year-ago period and are at the highest level since the EIA began keeping records in 1982. Moreover, domestic output has risen to 9.13 million barrels per day, the most since Feb 2016.

Time to Start Building Positions

After being under the pump for the most part of three years, crude prices have only started recovering. Consequently, there are investors who see oil’s recent slump as a temporary event and decide to build or increase their position in oil-related companies.

The rig counts – both U.S. and International – have bottomed and activity is starting to bounce off. Oil has rebounded from its multi-year lows reached in 2016 and while the commodity may not be at a level many thought they would be at this time of the year, even at today’s prices certain companies are in a position to earn profits.

Opportunity Knocks for Intelligent Investors

Now for that awkward business of actually selecting the companies.

One of the ways to get it right is to select beaten down stocks. Stressed valuations do not always indicate that the stock has lost all potential. In fact, some could actually make a great buy. But prospective investors need to do adequate research before betting one’s hard-earned money on such stocks.

Often, the herd mentality of investors compels them to dump stocks hovering around their year-long lows. However, the rationale that goes against this view is that stocks might have tumbled over the past due to varied reasons, be it company-specific or macroeconomic.

With the help of our Zacks Stock Screener, we have selected 5 stocks that are trading near 52-week lows. In particular, we have taken current price as a percentage of the 52-week high-low range under 10 (a value of 0 indicates that the stock is trading at its 52-week low).

A favorable Zacks Rank #1 (Strong Buy) or #2 (Buy), which justifies a company’s strong fundamentals and potential to overcome the current headwinds, further adds value to these stocks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Range Resources Corp. RRC: Based in Fort Worth, TX, Range Resources is an independent energy producer, with primary focus on the southwestern, Appalachian and Gulf Coast regions of the U.S.

Zacks Rank #1

Price as a % of 52 Week High-Low Range: 2.19%

Range Resources Corporation Price

 

Range Resources Corporation Price | Range Resources Corporation Quote

Bellatrix Exploration Ltd. BXE: Another upstream player, Calgary-headquartered Bellatrix Exploration’s producing properties are based in West Central Alberta.

Zacks Rank #1

Price as a % of 52 Week High-Low Range: 0.75%

Bellatrix Exploration Ltd Price

 

Bellatrix Exploration Ltd Price | Bellatrix Exploration Ltd Quote

Basic Energy Services Inc. BAS: Founded in 1992, Fort Worth, TX-based Basic Energy Services is a top provider of well servicing rigs and equipments.

Zacks Rank #2

Price as a % of 52 Week High-Low Range: 0.17%

Basic Energy Services, Inc. Price

 

Basic Energy Services, Inc. Price | Basic Energy Services, Inc. Quote

Cobalt International Energy Inc. CIE: Cobalt International Energy is a Houston, TX-based independent, oil-focused exploration and production firm, with assets spread over the deepwater of the U.S. Gulf of Mexico and offshore Angola and Gabon in West Africa.

Zacks Rank #2

Price as a % of 52 Week High-Low Range: 0.92%

Cobalt International Energy, Inc. Price

 

Cobalt International Energy, Inc. Price | Cobalt International Energy, Inc. Quote

Lonestar Resources US Inc. LONE: Headquartered in Fort Worth, TX, Lonestar is an oil and gas exploration and production company with primary focus on the Eagle Ford Shale in South Texas.

Zacks Rank #2

Price as a % of 52 Week High-Low Range: 8.85%

Lonestar Resources US Inc. Price

 

Lonestar Resources US Inc. Price | Lonestar Resources US Inc. Quote

Bottom Line

The greatest opportunities could be found by buying fundamentally sound stocks when everyone is selling them.

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Bellatrix Exploration Ltd (BXE): Free Stock Analysis Report
 
Basic Energy Services, Inc. (BAS): Free Stock Analysis Report
 
Range Resources Corporation (RRC): Free Stock Analysis Report
 
Cobalt International Energy, Inc. (CIE): Free Stock Analysis Report
 
Lonestar Resources US Inc. (LONE): Free Stock Analysis Report
 
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