Every trading day Torvanta ranks the 525 large-cap stocks its model portfolios choose from on valuation, growth, estimate revisions, price trend, news and risk. Each Sunday we pick one sector and show two names the model rates highly there: a Standout, one of the sector's larger companies, and a Hidden Gem, a smaller, less-covered company. This week: Energy, where 13 of 21 S&P 500 companies rank in the model's top 100.
Model rank: top 50 of 525 · P/E 11.2x · 3-month return +6.9%
One of the larger companies in Energy (market value $78 billion) and among the model's top 5 of 21 in the sector.
A profitable grower — an operating margin of 33%, sales up 19% over the past year, earnings expectations trending higher and a strong price trend. In the news: Benzinga (Oct 9): UBS Maintains Buy on EOG Resources, Raises Price Target to $186. Next catalyst: earnings on Nov 4.
EOG: six months against its sector and the S&P 500
Why the model ranks it highly
Revenue growth of 19% over the past year, faster than 82% of the S&P 500
Analysts raised earnings estimates over the past month
A price trend stronger than 75% of the index (+7% over three months)
Operating margins in the top 30% of the index
Context
Last report (Aug 4): earnings beat estimates by 2% and the stock moved -7.9% around the report
Insiders: $8M of open-market sales in 90 days and no purchases (sales are often routine: pay, taxes, diversification)
Model rank: top 100 of 525 · P/E 11.5x · 3-month return +6.6%
Smaller and less followed than most of the sector (market value $33 billion, with 63 news stories in the past month against a sector median of 149), yet ranked by the model among 21 in Energy.
A profitable grower — sales up 32% over the past year, an operating margin of 42% and a strong price trend. Main risk: earnings expectations trending lower. In the news: MarketWatch (Oct 1): EQT Corp. stock outperforms competitors on strong trading day. Next catalyst: earnings on Oct 19 (within two weeks, expect a bigger move than usual).
EQT: six months against its sector and the S&P 500
Why the model ranks it highly
Revenue growth of 32% over the past year, faster than 93% of the S&P 500
A price trend stronger than 74% of the index (+7% over three months)
Operating margins in the top 30% of the index
What to watch
Analysts cut earnings estimates over the past month
Context
Last report (Jul 21): earnings missed estimates by 3% and the stock moved +10.1% around the report
Insiders: $10M of open-market sales in 90 days and no purchases (sales are often routine: pay, taxes, diversification)
Valuation: the typical Energy company trades at 16 times earnings against 24 for the typical S&P 500 company, a discount that can mean value or doubts about growth.
Growth: median revenue growth is +14% over the past year against +8% for the market.
Momentum: the typical Energy stock is +6.6% over three months against -2.5% for the typical S&P 500 stock.
Model view: Energy is 4% of the stocks the model ranks but 13% of its top 100, so the model leans toward it right now.
See the model's Energy leader and every other sector's
The model ranks 13 Energy stocks in its top 100 right now. Subscribers Only Weekly names each sector's leader every Sunday, and subscribers see every one of them, and every other sector, re-ranked each trading day with the reasoning, plus the model portfolio's own trades.
Research only, not investment advice or a recommendation to buy or sell any security. Rankings change as data changes and can be wrong. Torvanta and its founder may hold positions in securities discussed. Past performance does not guarantee future results.