Energy Business

SunTrust Has 5 Buy-Rated Energy Stocks Trading Under $10 With Huge Upside Potential

Lonestar Resources

This may be the consummate play for aggressive accounts looking to buy size. Lonestar Resources US Inc. (NASDAQ: LONE) engages in the acquisition, development and production of unconventional oil and natural gas properties. Its portfolio includes the Eagle Ford Shale.

The company announced this week that its board of directors has approved a capital-flexible budget that ranges from 17 gross/15.6 net wells, which it estimates will cost $107 million, to a high of 20 gross/18.6 net wells, which are budgeted to cost $130 million. As commodity prices fell precipitously in the fourth quarter of 2018, Lonestar suspended drilling operations pending the negotiation of contracts for drilling and completion operations, which gave the company sufficient flexibility to “dial-in” activity levels to react to commodity prices and expected cash flow generation capacity.

The massive $8 SunTrust price target compares to the $6.50 consensus figure from analysts. Lonestar shares ended the week at $4.73 apiece.

Ring Energy

This is another small capitalization play that analysts at SunTrust have been positive on for some time. Ring Energy Inc. (NYSE: REI) is engaged in oil and natural gas acquisition, exploration, development and production activities in the United States. Its exploration and production interests are focused on Texas and Kansas, while its primary drilling operations target the Central Basin Platform in Andrews County and Gaines County, Texas, and the Delaware Basin in Reeves County and Culberson County, Texas.

Ring Energy’s long-term business strategy is focused on the exploration, development and acquisition of oil and natural gas properties in the Permian and Mid-Continent regions of the United States, and it primarily sells its oil and natural gas production to end users, marketers and other purchasers.

SunTrust has set its price target at a massive $12. The posted consensus figure was last seen at $8.92. The stock closed trading most recently at $6.33.

Superior Energy Services

This is an oilfield services play that looks very cheap now. Superior Energy Services Inc. (NYSE: SPN) provides a range of services and products to the energy industry related to the exploration, development and production of oil and natural gas.

The company’s segments include Drilling Products and Services, which rents and sells bottom hole assemblies, drill pipe, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, production and work-over activities.

The Onshore Completion and Workover Services segment provides pressure pumping services used to complete and stimulate production in new oil and gas wells, fluid handling services and well-servicing rigs that provide a range of well completion and maintenance services.

Lastly, the Production Services segment provides intervention services, such as coiled tubing, cased hole and mechanical wireline, hydraulic workover and snubbing, and remedial pumping services, and the Technical Solutions segment provides services requiring specialized engineering, manufacturing or project planning.

The SunTrust price target for the stock is $8. The consensus target is $6.26, and the shares closed on Friday at $4.79.

These are five energy stocks for aggressive accounts that look to get share count leverage on companies with sizable and reasonable upside potential. While not suited for all investors, they are not penny stocks with absolutely no track record or liquidity, and a major Wall Street firm has research coverage on them.

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