4 Undervalued Energy Stocks Under $25 with Big Potential

Energy is back in the headlines because the peace deal with Iran keeps getting pushed further and further away. This means that oil prices should be higher for longer, which is bad news for inflation, but great news for investors in the energy space. But at this stage, the obvious stocks are already getting overcrowded. So, I went looking for the best under the radar opportunities in energy, those with strong fundamentals, yet amazingly underpriced, paving the way for exceptional upside potential. So, today I'm going to share with you four special energy stocks. And here's a little bonus, each is currently trading under $25 per share. As always, stay around to the end because I have saved the best opportunity for last. We will start with Petrobras, PBR, with the which is a Brazilian oil giant operating at a massive scale. Sadly, US investors often bypass the international names for the domestic producers because they are more familiar with them. That often paves the way for a great value play, which is exactly the case here. But before I get ahead of myself, let me tell you who I am. I'm Steve Wright, my surname. Everyone calls me Righty. I've been investing for over 40 years and currently a partner at wallstreetzen.com, where our quant rating system identifies stocks with the highest likelihood to outperform the market. And if you like timely stock market topics like this one, then please hit that like button as it tells me to record more videos like this in the future. Okay, let's get back to the beaches of Brazil, an exciting investment story for Petrobras, right? This is one of the lowest cost producers in the world. And so, when oil prices surge, then almost all that extra revenue flows straight down the bottom line. Now, this is how they pumped out 160% earnings growth in the latest quarterly report. Exceptional growth is half the story. The other half is value, which shows up quite clearly with their rock-bottom PE under five and PEG ratio of only 0.42. Remember, the average PE these days is around 20, right? So, five is ridiculously low. And then, as far as the PEG ratio, that 0.42 stacks up nicely versus the average stock at 1.5. Both are pointing to stocks being obscenely undervalued at this time. Let's dig in deeper to the stock's attractiveness by considering the analysis of the Zen Ring's Quant model. All in all, it reviews 115 different fundamental, technical, and AI factors for every stock, and then it distills it down into an intuitive letter grade of A through F. And yes, the higher the grade, the higher the expected returns for shares. The Zen Ring scores Petrobras in the top 7% of all stocks, which amounts to a very appealing B rating, which is a buy recommendation. Now, note that our A ratings are reserved for only the top 5% of all stocks. So, Petrobras is very close to that territory, meaning calling it a B+ or an A- might be a little bit more accurate. Beyond the overall Zen Ring, we also provide seven underlying component grades that shines a light on the unique strength and weaknesses of any stock. Now, for Petrobras, there are five particularly strong grades worth noting. This starts off with sentiment in the top 20% of all stocks. It tells you the smart money is leaning into these shares. Financial strength is also top 20%. Then we make a big leap forward to top 7% for momentum. Our AI timeliness factor is in the top 3%. Then coming down the home stretch, as it should be for this video today, is top 2% of all stocks for value. Now, this is based on 21 different measures of value, so you know this means it is woefully underpriced at this time. This was the perfect pick to start the video as Petrobras combines exceptional growth plus deep value and then the sparkling fundamental review as proven by the Zen Ring's Quant model. Add it all up and you can appreciate there's ample upside potential packed into these shares. Before we get to that second stock, I want to personally invite you to my next live training session this coming Monday. The focus is on timing market insights plus my top picks. Now, it's totally free, but you do need to sign up. You can do that now to join me this coming Monday. Just go to wallstreetzen.com/live. Next up, we have Permian Resources with the symbol PR, and this one brings us back to uh one of the major energy producers in the US. As the name implies, they're a leading producer in the Permian Basin in West Texas and New Mexico. All right, their claim to fame is being one of the lowest cost producers in the country, which is good news no matter which direction oil prices head from here. This is a company that grows by being a consistent and disciplined buyer of other companies and properties, and has done nearly 200 small bolt-on acquisitions over the year, picking up acreage at a fraction of what competitors pay, and then stitching it together into a single highly efficient producer. The most recent quarter was another one in a long line of impressive earnings beats. Yes, this was uh the case for most of the folks in the energy patch, but the key is sign to production ramping up, which bolsters the growth outlook for the future. One of the better parts of the bullish case for Permian Resources is the strong Wall Street support. Altogether, they have 15 analysts calling it a buy or strong buy recommendation. This includes fair value uh price targets well above current levels. I also find it telling that some of the highest-rated energy analysts are the most bullish on these shares. This improves the odds of investment success with PR. Our quant model is also enthusiastic about uh shares of Permian, where they uh earn an elite A rating, which amounts to a strong buy recommendation. That label is well deserved because A-rated stocks have beaten the S&P 500 by nearly 3:2:1 over the past 20 years. The component grades reveal a broad profile of fundamental strength, so let's dig into those. We start off with value in the top 31% of all stocks, then we make a big jump forward from there to the top 12% of all stocks for growth. This bodes well for more earnings beats ahead. Momentum is top 10%, the AI timeliness grade is top 9%, financial strength is top 6%, and the standout grade is sentiment, in the top 4% of the entire market. This tells you the smart money crowd is already leaning into these shares. Now, the one honest knock is uh the low grade for safety, in the bottom third of all stocks tracked, but that's kind of to be expected with just about any energy stock that is going to dance to the beat of the daily swings in energy prices. Being a leading low-cost producer in the US with strength in acquisitions is a pretty good starting point for picking up a top energy stock. Now add on the broad-based Wall Street support and the bullish nod from the Zen Ring's quant model, you'll be hard-pressed to find a better energy stock. Now the cherry on top is grabbing these shares for under $25 per share. Quick ask before we move on to our next names. If you like what you're hearing, then do me a solid and hit subscribe and then ring the notification bell. That's because I publish data-driven stock analysis like this every single week and these steps help ensure that you get my future videos as they get released. Our third stock plays the oil and gas game in a completely different way which should add appeal greatly to investors. I'm talking about Kimmerl Royalty Partners with the symbol KRP which is trading around $15 a share at this time. This is not a business that drills wells. It does not run rigs or do the expensive, risky part of getting oil out of the ground. Instead, they own the mineral and royalty rights underneath the land. So when somebody else drills and produces on the acreage, Kimmerl just collects a check. And it owns interests spread across more than 130,000 wells in 28 different states. Somebody else takes the operating risk. Kimmerl takes a cut off the top and they are getting a cut off the top on 130,000 wells with particular strength in natural gas. And there's a genuine catalyst building underneath their entire business model right now. All those new AI data centers need enormous amounts of electricity and a lot of power gets generated by, you guessed it, natural gas which means rising demand for exactly what is flowing out of their acreage. And the most recent quarter shows the business model is working extremely well. Back in early August, Kimmerl served up a 50% earnings beat. This is very uncommon for this type of business where outcomes are usually a bit more predictable. But, it does it underscore the strong catalyst at play for the firm. Oh, and did I forget to mention they pay a dividend yield greater than 12% a year? Yeah. So, you can imagine that a lot of that extra profitability is likely going to flow through to the dividend over time. As the Zen Rings Kimble scores in the top 9% of all stocks for a strong fundamental profile, this amounts to a B rating and those stocks have beaten the S&P 500 by about 2 to 1 over the years. The component grades help confirm the positive view on these shares. Safety grade is in the top 30%. This is unusual for an energy stock and that's very attractive to have in these shares. Next, we have growth in the top 20% of all stocks, meaning they've been a very consistent grower over the years. The AI Timeless grade lands in the top 17%. Sentiment is top 8% and we wrap it up with a top 7% showing for financial strength. Think of the famous fable the tortoise and the hare. The last stock, Permian Resources, is the hare. They'll run the fastest when energy prices are running high as well. Whereas Kimble relatively is a tortoise, where their lower risk approach shows that slow and steady can certainly win the race. And can certainly win win the race when you add a 12% dividend yield on top. Before we get to our last energy stock, just one quick thing. If you want to stay one step ahead of the market, then join me live every Monday. That's when I share my updated market outlook and trading plan to outperform. It's also when I unveil my trade of the week based upon our proven Zen Rings Quant model and my greater than 40 years of investing experience. It's a free event, but you do need to register. Just go to wallstreetzen.com/live or click the link in the description down below or scan the QR code popping up on your screen. Just pause the video for a moment to sign up. I'll be patient and wait for you. Then I look forward to seeing you there on Monday. Let's end the video strong with DHT Holdings with the symbol of DHT. We are going for yet another corner of the energy game with this company that owns a fleet of large crude oil tankers. Oil demand keeps grinding higher, but the supply of these tankers is tight, and it takes years to build new ones. This leads to higher pricing and higher profit margins. On top of that, conflict in the Middle East has forced tankers onto longer routes around the the trouble spots, tying up ships for more days per voyage and squeezing capacity even further. The proof of these positive trends in pricing shows up in DHT's impressive 39% revenue growth over last year, and that translated into a, get ready for this, 149% increase in earnings. All that pricing strength flowing through straight to the bottom line is the whole investment story here, and right now there are no signs of it slowing down. Wall Street analyst coverage is a bit limited on these shares. Uh gladly, we had the valuable insights from the Quant model to shine a light on the investment case for DHT. Here we have another A-rated strong buy recommendation. In fact, it's the highest-rated stock in our video today and the top 2% of all stocks. Now, to be clear, it scores higher than 98% of stocks, which bodes well for future outperformance. The strength comes through uh quite clearly in the component grade, starting with the top 25% showing for uh sentiment. That means the smart money is circling these shares. Up next is growth, where it ranks in the top 22%. Momentum is top 15%. This shows that shares have been uh quite timely. Value is in the top 9% based upon 21 different measures of value. And the most impressive score is that top 2% showing for financials, which is unusual for a capital-intensive business like shipping. As you would expect, safety is the weak spot given that shipping is a cyclical industry. But as long as this cycle is ramping up, then earnings growth will be explosive, as will share price gains. This makes it very appealing to pick up DHT shares under 20 because it may set course for a much higher price soon. So, there are my four favorite undervalued energy names, all under $25 a share, and all flexing their fundamental muscles, as proven by the Zen Rings profiles. Speaking of which, we update the Zen Rings daily on our quote pages at wallstreetzen.com. So, it's a good habit to check the latest ratings before making any buy, hold, sell decisions. So, now is a good time to bookmark the site for all your future visits. Now, I want to hear from you. Which of these four stocks is your favorite? And are there any energy names you think I missed? Drop it all in the comment section below and share it with our community. And if you're not sure what to do with your life next, then consider checking out the video that's popping your screen right now. In that one, I broke down four tickers that are just too cheap to ignore. Go ahead and check it out now.