Unit Corp (UNT): Zacks Rank Buy

Unit Corp. (NYSE: UNT - News) estimates are moving higher after that latest quarterly report. EPS came in better than expected and shares are cheap thanks to the recent down turn.

Company Description

Unit Corp. has subsidiaries engaged in oil and gas exploration, production, contract drilling and gas gathering and processing.

Another Surprise

Unit reported its latest quarterly results on Aug 2. Net income jumped 55%, to $49.8 million. That works out to $1.04 per share, 7 cents better than expected. Revenue surged 42%, to $292 million.

The company's utilization rate has worked its way up to 60%, from 24% back in 2009. While the increase is good to see, it also leaves plenty of room for improvement.

Estimates Moving Higher

After the encouraging results analysts began moving full-year estimates higher. The Zacks Consensus Estimate is up 17 cents, to $3.93 for this year. Next year's is up 20 cents, to $4.77. That puts expected growth rates at 27% and 21%, respectively.

Drilling for Value

Shares of UNT are cheap right now, with a forward P/E of 11 times and they are trading at 1.2 times book value. The PEG ratio is around 0.8 times.

Buy on the Dip?

The market has been wild lately to say the least. But that has left some great opportunities out there. Take a look at this chart. Shares have been absolutely crushed, despite the continuously improving earnings estimates. Might be a good time to buy this Zacks #2 Rank (Strong Buy)

Read the March 23rd Feature Here

Unit Corp. - ticker UNT >

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service

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