Independent oil and natural gas company Camber Energy, Inc. (CEI) was caught up in the so-called meme stock frenzy in August-September 2021, and it soared to $4.85 from near $0.50 in just one month. While the stock declined significantly since then to trade below $1, it still looks highly overvalued. CEI’s 1029.22x trailing-12-month EV/Sales is 38,778.9% higher than the industry average of 2.65x.
Moreover, delays in the earnings release, negative revenue, and profit delivered over the years have led to the stock losing value. Although CEI’s latest acquisition of Electric Transmission & Open Conductor Detection Technologies has enabled the stock to gain momentum earlier this month, ceasefire talks between Russia and Ukraine have led to more than 10% yesterday. However, the stock still looks overvalued at the current price level. So, it is best avoided now.
Although the ceasefire talks between Russia and Ukraine and efforts to increase oil supply from various countries have led to oil prices witnessing a decline lately, the persisting issues are expected to keep energy prices high.
This backdrop should be favorable for fundamentally sound oil and gas stocks Baytex Energy Corp. (BTEGF) and Barnwell Industries, Inc. (BRN), currently trading below $5. So, these stocks could be better bets instead.
Baytex Energy Corp. (BTEGF)
Headquartered in Calgary, Canada, BTEGF is engaged in acquiring, developing, and producing oil and natural gas in the Western Canadian Sedimentary Basin and Texas. The company offers light oil and condensate, heavy oil, natural gas liquids, and natural gas. As of December 31, 2021, it had proved developed producing reserves of 129 million barrels of oil equivalent (mmboe); proved reserves of 278 mmboe; and proved plus probable reserves of 451 mmboe.
For its fiscal 2021 fourth quarter ended December 31, 2021, BTEGF’s revenue increased 130.9% year-over-year to $452.25 million. The company’s pre-tax income came in at $571.622 million, indicating a 77.9% year-over-year improvement. Its net income came in at $563.24 million for the quarter, up 154.7% from the year-ago period. BTEGF’s EPS increased 151.3% year-over-year to $0.98.
Analysts expect the company’s EPS to reach $0.71 for its fiscal year 2022, ending December 31, 2022, representing a 259.3% rise from the prior-year period. The consensus revenue estimate of $1.59 billion for the same fiscal year indicates a 9.1% year-over-year improvement. The company’s EPS is expected to grow at an 18.2% rate per annum over the next five years.
Over the past three months, the stock has gained 52.1% and closed yesterday’s trading session at $4.26.
BTEGF’s 4.81x forward EV/EBITDA is 30.2% lower than the 6.88x industry average. In terms of forward Price/Cash Flow, BTEGF is currently trading at 2.73x, 44% lower than the 4.88x industry average.
BTEGF’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has an A grade for Momentum, and a B grade for Value, Growth, and Quality. Click here to see the additional ratings for BTEGF’s Stability and Sentiment.
BTEGF is ranked #3 of 123 stocks in the A-rated Energy - Oil & Gas industry.
Barnwell Industries, Inc. (BRN)
BRN acquires and develops crude and natural gas assets in the province of Alberta; and invests in land interests in Hawaii. The company operates through three segments ─ Oil and Natural Gas; Land Investment; and Contract Drilling. It also owns and operates five water well drilling rigs, two pump rigs, and other ancillary drilling and pump equipment; drills water and water monitoring wells of varying depths; installs and repairs water pumping systems; and distributes trillium flow technologies.
For its fiscal 2021 fourth quarter ended December 31, 2021, BRN’s revenues increased 24.3% year-over-year to $5.45 million. The company’s EBIT came in at $245,000, compared to a loss of $248,000 in the year-ago period. BRN’s net earnings came in at $1.07 million, up 83.7% from the prior-year period. Its EPS increased 57.1% year-over-year to $0.11. As of December 31, 2021, the company had $12.14 million in cash and cash equivalents.
BRN has gained 3.2% over the past three months and ended yesterday’s trading session at $2.62.
In terms of trailing-12-month EV/Sales, BRN is currently trading at 0.72x, 73% lower than the 2.68x industry average. In terms of trailing-12-month Price/Sales, BRN is currently trading at 1.25x, which is 23.8% lower than the industry average of 1.64x.
BRN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
It has an A grade for Quality and a B grade for Sentiment. Click here to see the additional ratings for BRN (Momentum, Stability, Growth, and Value).
BRN is ranked #36 of 123 stocks in the same industry.
CEI shares were unchanged in after-hours trading Thursday. Year-to-date, CEI has gained 3.53%, versus a -7.14% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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