Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Energy Equipment & Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Energy Equipment & Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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4 Undervalued Energy Equipment & Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Energy Equipment & Services industry for Thursday, November 07, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Energy Equipment & Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Forum Energy Technologies, Inc.’s Value Grade

Value Grade:

Forum Energy Technologies, Inc. designs, manufactures, and distributes products serving the oil, natural gas, industrial, and renewable energy industries in the United States and internationally. It operates through three segments: Drilling & Downhole, Completions, and Production. The Drilling & Downhole segment designs, manufactures, and supplies products, and provides related services to the drilling, well construction, artificial lift, and subsea energy construction and services markets, including applications in oil and natural gas, renewable energy, defense, and communications. This segment offers drilling technologies consisting of capital equipment and a line of products consumed in the drilling process; well construction casing and cementing equipment, and products for artificial lift equipment and cables; and subsea remotely operated vehicles and trenchers, submarine rescue vehicles, specialty components and tools, and technical services. The Completions segment offers hydraulic fracturing pumps, cooling systems, high-pressure flexible hoses, and flow iron for pressure pumping markets; wireline cable and pressure control equipment for well completion and intervention service markets; and coiled tubing strings and coiled line pipe and related services. The Production segment designs, manufactures, and supplies products, and provides related equipment and services for production and infrastructure markets. This segment offers engineered process systems, production equipment, specialty separation equipment, and various industrial valves for oil and natural gas customers, power generation, renewable energy, and other general industrial applications. The company was formerly known as Forum Oilfield Technologies, Inc. and changed its name to Forum Energy Technologies, Inc. in August 2010. Forum Energy Technologies, Inc. was incorporated in 2005 and is headquartered in Houston, Texas.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Forum Energy Technologies, Inc. has a Value Score of 88, which is considered to be undervalued.

When you look at Forum Energy Technologies, Inc.’s price-to-sales ratio at 0.23 compared to the industry median at 0.87, this company has a lower price relative to revenue compared to its peers. This could make Forum Energy Technologies, Inc.’s stock more attractive for value investors.

Now, let’s assess Forum Energy Technologies, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 6.9, when compared to the industry median of 7.2, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Forum Energy Technologies, Inc.’s shareholder yield is lower than its industry median ratio of (0.50%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Forum Energy Technologies, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.33. This could make Forum Energy Technologies, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Forum Energy Technologies, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Forum Energy Technologies, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 10.65. This could make Forum Energy Technologies, Inc. more attractive because the lower P/FCF ratio indicates that Forum Energy Technologies, Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Koil Energy Solutions, Inc.’s Value Grade

Value Grade:

Koil Energy Solutions, Inc., an energy services company, provides equipment and support services to the energy and offshore industries. The company offers engineering and project management services, including the design, installation, and retrieval of subsea equipment and systems; connection and termination operation services; well-commissioning services; and construction support services. It provides project management and engineering; spooling; testing and commissioning; storage management; and refurbishment and repurposing of recovered subsea equipment, as well as support services for offshore interventions. In addition, the company offers loose steel tube flying lead and umbilical hardware products, as well as riser isolation valves and subsea isolation valve systems. Further, it provides installation aids, including flying lead installation systems, tensioners, lay chutes, buoyancy modules, clump weights, mud mats, pumping and testing skids, control booths, fluid drum carriers, under-rollers, carousels, running and parking deployment frames, termination shelters, pipe straighteners, subsea deployment basket systems, horizontal drive units, and rapid deployment cartridges; and termination services, including bend stiffener latches. The company sells its products through a sales force to energy companies, subsea equipment manufacturers, subsea equipment installation contractors, offshore drilling contractors, engineering and construction companies, and other companies involved in maritime operations. The company was formerly known as Deep Down, Inc. and changed its name to Koil Energy Solutions Inc. in April 2022. Koil Energy Solutions Inc. was founded in 1997 and is headquartered in Houston, Texas.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Koil Energy Solutions, Inc. has a Value Score of 62, which is considered to be undervalued.

Koil Energy Solutions, Inc.’s price-earnings ratio is 14.1 compared to the industry median at 16.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Koil Energy Solutions, Inc. more attractive for value investors.

Koil Energy Solutions, Inc.’s price-to-book ratio is lower than its peers. This could make Koil Energy Solutions, Inc. more attractive for value investors when compared to the industry median at 1.33.

You can read more about Koil Energy Solutions, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Mammoth Energy Services, Inc.’s Value Grade

Value Grade:

Mammoth Energy Services, Inc. operates as an energy services company in the United States, Canada, and internationally. The company operates in four segments: Well Completion Services, Infrastructure Services, Natural Sand Proppant Services, and Drilling Services. The company offers pressure pumping and hydraulic fracturing, sand hauling, and water transfer services; and master services agreements. It also provides a range of services on electric transmission and distribution, and networks and substation facilities, including engineering, design, construction, upgrade, maintenance, and repair of high voltage transmission lines, substations, and lower voltage overhead and underground distribution systems; storm repair and restoration services; and commercial services comprising installation, maintenance, and repair of commercial wiring. In addition, the company mines, processes, and sells natural sand proppant used for hydraulic fracturing; buys processed sand from suppliers on the spot market for resale; and provides logistics solutions to facilitate delivery of frac sand products. Further, it offers contract land and directional drilling services; and rig moving services. Additionally, the company offers aviation services, equipment rental, remote accommodation, and equipment manufacturing services. It serves government-funded, private, public investor-owned, and co-operative utilities; independent oil and natural gas producers; and land-based drilling contractors. The company was formerly known as Mammoth Energy Partners LP and changed its name to Mammoth Energy Services, Inc. in October 2016. Mammoth Energy Services, Inc. was founded in 2014 and is headquartered in Oklahoma City, Oklahoma.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Mammoth Energy Services, Inc. has a Value Score of 88, which is considered to be undervalued.

Mammoth Energy Services, Inc.’s price-to-book ratio is higher than its peers. This could make Mammoth Energy Services, Inc. less attractive for value investors when compared to the industry median at 1.33.

You can read more about Mammoth Energy Services, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Bristow Group Inc.’s Value Grade

Value Grade:

Bristow Group Inc. provides vertical flight solutions. The company primarily offers aviation services to integrated, national, and independent offshore energy companies and government agencies. It also provides personnel transportation, search and rescue, medevac, ad hoc helicopter, fixed wing transportation, unmanned systems, and ad-hoc helicopter services, as well as logistical and maintenance support, training services, and flight and maintenance crews. The company has a fleet of aircrafts. It has customers in Australia, Brazil, Canada, Chile, the Dutch Caribbean, the Falkland Islands, India, Ireland, the Kingdom of Saudi Arabia, Mexico, the Netherlands, Nigeria, Norway, Spain, Suriname, Trinidad, the United Kingdom, and United States. Bristow Group Inc. is based in Houston, Texas.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Bristow Group Inc. has a Value Score of 62, which is considered to be undervalued.

Bristow Group Inc.’s price-earnings ratio is 19.9 compared to the industry median at 16.2. This means that it has a higher price relative to its earnings compared to its peers. This makes Bristow Group Inc. less attractive for value investors.

Bristow Group Inc.’s price-to-book ratio is lower than its peers. This could make Bristow Group Inc. fairly attractive for value investors when compared to the industry median at 1.33.

You can read more about Bristow Group Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Energy Equipment & Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Energy Equipment & Services stocks as well as other industrys.

Choosing Which of the 4 Best Energy Equipment & Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Forum Energy Technologies, Inc. stock has a Value Grade of A.
• Koil Energy Solutions, Inc. stock has a Value Grade of B.
• Mammoth Energy Services, Inc. stock has a Value Grade of A.
• Bristow Group Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 undervalued stocks in the Energy Equipment & Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Energy Equipment & Services Stocks

Want to learn more about Energy Equipment & Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 4 Undervalued Energy Equipment & Services Stocks for Thursday, November 07
• 5 Undervalued Energy Equipment & Services Stocks for Wednesday, November 06
• 5 Undervalued Energy Equipment & Services Stocks for Tuesday, November 05
• 4 Undervalued Energy Equipment & Services Stocks for Monday, November 04

AAII Disclaimer

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