The Lemon Fool

do you know oil companies with low price/earnings?

I think there is an oil/gas company with price/earnings around 3.

look wrote:do you know oil companies with low price/earnings?

I think there is an oil/gas company with price/earnings around 3.

Gazprom?

GKP is on 2.8, according to Stocko. You would be well advised to look into it in detail before investing!

Back in 2000 SIA was on about 2, which proved to be a very good entry. But clearly there is no guarantee the POG movement of the early 2000s is going to be repeated from here.

The problem is screening for "oil companies" and what you mean by those 2 words. I had a quick shufty using Simply Wall Street and sorted based on PE low to high. I actually sorted on a subset of O&G..."Integrated Oil and GasOil and Gas Exploration and Production"

there were over 600 hits.


Source Simplywallstreet https://simplywall.st/screener/create

look wrote:
Do you know oil companies with low price/earnings?

I think there is an oil/gas company with price/earnings around 3.

I read somewhere earlier that you can buy much higher PE oil companies, but then take raw garlic to help reduce the risks.

Indeed. And of course, PE is only a tiny part of the valuation. If you are looking at a company with infinite developed reserves then a low PE would be a very good indicator. But, of course, they don't exist.

A company with a low PE may have reserves that are rapidly depleting, and no strong development prospects, or it could be just beginning to produce from reserves that have a high probability of further enlargement and development.

In practice, a oil producer on a low PE is much more likely to be in the former category than the latter!

Surely really difficult to use PE ratio with most of the sector - earnings are just too lumpy

Fudgenfun wrote:Surely really difficult to use PE ratio with most of the sector - earnings are just too lumpy

Not forgetting that companies will only be profitable above a minum oil price which varies by company and taxation regime.

II did a trawl recently of low PE US companies and reported it here viewtopic.php?t=33045#p525946
PE's are no substute for Proselenes' like attention, the trouble with that being there is about 716 Oil&Gas companies in the US alone. So I find PE to be a useful filter. I don't have the time to research all the non-profit making companies, that have perhaps not yet even discovered oil. So a low but positive PE I find useful. It means they are making money, so they are doing something right. I like to find say 50 companies that are not too big, whittle them down the ones that have very lumpy or declining quarterly earnings by looking at their Yahoo finance summary details, read any investor comments and then buy a small stake in about 15 of them and watch them closely. By too big I mean a company like Exxon is not likely to grow much and because it's so big attracts a premium for percieved low risk. The risk can also be reduced by puchasing a lot of different shares in small amounts. Generally smaller, nimbler companies are the faster growing. I don't look at debt, balance sheets are hard work, I don't look at location other than for tax purposes, don't look at prespectivity, (that's the oilcos job) and are very hard to decipher unless you are an insider geologist. The debt issues I try & learn about while I hold them.

Anyway a loe PE tip that I am inested in (in a small way) : A large cap with a low PE of 2.94 and a dividend yield of 48% https://finance.yahoo.com/quote/PBR/