Zacks Investment Ideas Feature Highlights: CVR Energy, Stone Energy and Complete Production Services

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Jul 08, 2011, 09:30 ET

CHICAGO, July 8, 2011 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: CVR Energy, Inc. (NYSE: CVI), Stone Energy (NYSE: SGY) and Complete Production Services (NYSE: CPX).

It's Time to Buy Energy Stocks

Do you own any energy stocks?

Even with crude trading around $100 a barrel and sky high gasoline prices, energy stocks seem to be out of favor with most investors. I hardly hear any buzz about them.

Conversely, back in 2007 and 2008 when crude was soaring to a new high of $147 a barrel, all anyone wanted to be in were energy stocks.

Where's the love now?

Over the last 6 months, the perfect storm of higher commodity prices and stronger demand has been brewing which means earnings estimates in the energy sector are rising.

This could be just the beginning of an earnings explosion.

It's Time To Get Back Into Energy

Without much fanfare, many energy stocks have been moving higher over the last six months.

Does that mean it's too late to get in?

Never fear.

While shares have moved higher, the valuations are still extremely attractive. You won't see any P/Es in the 50s or the 60s like you will with the popular Internet and technology stocks.

Instead, you'll find just the opposite.

Energy stocks are actually cheap. Now is the time to bulk up your portfolio with solid names expected to grow earnings by the double and triple digits.

Forget Big Oil

There are a lot of ways to "play" energy.

Most investors routinely turn to the large, well known integrated energy stocks like Dow components Exxon and Chevron when they're buying energy stocks. There's nothing wrong with this strategy.

But you can do better.

Seek out growth in the lesser known names in the exploration, refining and drilling services sectors.

All have their hand on the pulse of the energy market but the upside possibility is greater than with the slower growing Big Oil plays.

3 Amazing Energy Stocks to Buy Right Now

1. CVR Energy
2. Stone Energy
3. Complete Production Services

These 3 energy stocks are all cheap, are expected to see huge earnings growth and have momentum as they're trading near 52-week highs.

That is the triple threat- a stock with value, growth and momentum all rolled into one.

1. CVR Energy, Inc. (NYSE: CVI) is a mid-continent refiner which also is majority owner of a nitrogen fertilizer producer it spun off earlier this year.

Forward P/E: 8.7
Expected 2011 EPS Growth: 784%

This Zacks #1 Rank (strong buy) has a ton of momentum, with shares at 52-week highs, up 76.5% in the last 6 months compared to the S&P 500's return of just 6.2%.

2. Stone Energy (NYSE: SGY) is a mid-cap oil and natural gas explorer with interests in the Gulf of Mexico and Appalachia.

Forward P/E: 9.4
Expected 2011 EPS Growth: 66.4%

This Zacks #2 Rank (buy) has been trading in a more narrow trading range recently and will tend to move with the price of crude. Still, shares are new 52-week highs and have returned 50% in the last 6 months.

3. Complete Production Services (NYSE: CPX) is a way to get in on the unconventional oil and gas plays in the shale regions of North America. This Zacks #1 Rank (strong buy) provides oilfield services which focus on the completion and production phases of oil and gas wells.

Forward P/E: 12.8
Expected 2011 EPS Growth: 150.4%

The drilling service companies are hot. Shares have risen 150% in the last 6 months, well outpacing the S&P 500's 6.2% return.

Buying Opportunity in Energy

Instead of complaining about the price of gas (as I certainly do!)- you can get in the game by actually becoming an owner of energy stocks.

These 3 energy stocks are cheap but are expected to see huge growth in 2011. That's a winning combination.

[The author of this article owns shares of Exxon.]

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