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March Undervalued Energy Stocks To Invest In

Kari Hurd

Sandridge Mississippian Trust II and Chesapeake Granite Wash Trust are energy companies that are currently trading below what they’re actually worth. Investors can determine how much a company is worth based on how much money they are expected to make in the future, or compared to the value of their peers. The list I’ve put together below are of stocks that compare favourably on all criteria, which potentially makes them good investments if you believe the price should eventually reflect the stock’s actual value.

Sandridge Mississippian Trust II (NYSE:SDR)

SandRidge Mississippian Trust II, a statutory trust, holds royalty interests in specified oil and natural gas properties. Sandridge Mississippian Trust II was formed in 2011 and with the company’s market capitalisation at USD $45.65M, we can put it in the small-cap group.

SDR’s stock is now hovering at around -68% under its true level of $2.93, at a price tag of US$0.92, based on its expected future cash flows. This discrepancy gives us a chance to invest in SDR at a discount. In terms of relative valuation, SDR’s PE ratio stands at 3.96x while its Oil and Gas peer level trades at, 12.53x indicating that relative to its peers, we can buy SDR’s stock at a cheaper price today. SDR is also in great financial shape, with short-term assets covering liabilities in the near future as well as in the long run. SDR also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in Sandridge Mississippian Trust II? Find out more here.

NYSE:SDR PE PEG Gauge Mar 20th 18

Chesapeake Granite Wash Trust (NYSE:CHKR)

Chesapeake Granite Wash Trust owns royalty interests in the oil and natural gas properties located in the Colony Granite Wash play in Washita County in the Anadarko Basin of Western Oklahoma. Chesapeake Granite Wash Trust was formed in 2011 and with the company’s market cap sitting at USD $70.13M, it falls under the small-cap stocks category.

CHKR’s stock is currently hovering at around -66% beneath its true level of $4.42, at a price of US$1.50, based on its expected future cash flows. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. Additionally, CHKR’s PE ratio is trading at around 5.29x against its its Oil and Gas peer level of, 12.53x suggesting that relative to its peers, CHKR can be bought at a cheaper price right now. CHKR is also in good financial health, with short-term assets covering liabilities in the near future as well as in the long run. CHKR also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in Chesapeake Granite Wash Trust? Find out more here.

NYSE:CHKR PE PEG Gauge Mar 20th 18

SandRidge Permian Trust (NYSE:PER)

SandRidge Permian Trust holds royalty interests in specified oil and natural gas properties in the Permian Basin located in Andrews County, Texas. SandRidge Permian Trust was started in 2011 and with the company’s market capitalisation at USD $105.00M, we can put it in the small-cap stocks category.

PER’s stock is currently trading at -66% beneath its intrinsic value of $5.85, at a price of US$2.00, according to my discounted cash flow model. This discrepancy gives us a chance to invest in PER at a discount. Additionally, PER’s PE ratio is currently around 4.31x while its Oil and Gas peer level trades at, 12.53x meaning that relative to its peers, you can buy PER’s shares at a cheaper price. PER is also a financially healthy company, with current assets covering liabilities in the near term and over the long run. PER has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More on SandRidge Permian Trust here.

NYSE:PER PE PEG Gauge Mar 20th 18

For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks. Or create your own list by filtering companies based on fundamentals such as intrinsic discount, health score and future outlook using this free stock screener.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.