September 1, 2022, Scorpio Tankers Inc. (NYSE:STNG) and EOG Resources, Inc. (NYSE:EOG)
Singled out by a legendary growth investor, these energy standouts have more room to run as the best stocks to buy now.
Investors appear to be in full-blown panic mode. The market fell for a fourth consecutive day to close out August, and the sentiment is reeling. However, stocks like Scorpio Tankers Inc. (NYSE:STNG) and EOG Resources, Inc. (NYSE:EOG) have unique positioning to continue their impressive 2022s as potentially the best stocks to buy now.
Stock gurus aren’t always correct, but ones like Louis Navellier have a sterling reputation. Navellier is one of history’s most iconic growth stock investors, and he’s made a career out of dwarfing the performance of the S&P 500.
In one of his articles, written ironically during this week’s sell-off called, “The Bull Market is Still Alive,” he highlights Scorpio Tankers and its explosive gains this year. His Prediction 2022 presentation also singled out EOG Resources as “Grade A” and a “Strong Buy.”
When he highlights two stocks, it’s worth listening to.
But it’s not just about one person here. Both companies have performed remarkably in 2022 and could continue to do so based on an increasingly belligerent Russia blackmailing Europe into an energy crisis and recession.
These companies serve a fundamental purpose in the global energy market- STNG in the tanking and shipping area and EOG in oil and gas supply and pipelines.
Both companies also have significant analyst upside. However, that only scratches the surface. Countless other reasons make these companies the best stocks to buy now, even if the broader market seems a bit questionable as of late.
Scorpio Tankers Inc. (NYSE:STNG)
This essential enterprise powering the global energy trade has a potential 20+% upside.
Louis Navellier highlighted Scorpio Tankers in his piece “The Bull Market is Still Alive” because of its colossal price uptick in 2022.
Scorpio is a prominent tanker engaging in the seaborne transportation of refined petroleum products throughout global shipping markets. The situation with Russia and Ukraine and the disruption to global energy supply and shipping routes have made this Company invaluable.
Its recent earnings crushed estimates, its revenue increased almost 200% since last year, and its fundamentals are rock solid.
Global catalysts and a strong backbone explain its almost 230% rally in 2022. But it may only be the start. 2 recent analyst upgrades gave it its street-high $50.00 price target, good for a 20.19% upside. Tipranks also calls the stock a “STRONG BUY.”
As Bank of America said in a Monday note (August 29, 2022) “Last week Europe awoke to a bitter truth: the energy crisis is here to stay.”
Earnings Growth More Than Quadrupled as Revenue Surged Triple-Digits
Scorpio Tankers last posted its quarterly earnings results on July 28, 2022; they beat even the loftiest expectations.
EPS came in at $3.13, beating analyst estimates of $2.85. To illustrate how insane this figure is, the same quarter a year ago reported a negative EPS of -$0.94. So not only did earnings turn positive. They almost quadrupled.
Moreover, revenue came in at $405.80 million for the quarter, crushed analyst estimates of $333.11 million, and marked a 191.1% year-over-year surge.
Considering the current global energy market, STNG remains one of the best stocks to buy now because it could continue on this trajectory. Net income could grow another 320.4% at an average of 65.1% over the next five fiscal years.
Strong Margins and a 100% BUY Rating Based on Technical Indicators
STNG’s 7 out of 9 Piotroski Score indicates healthy Liquid Balance Sheets, Profitability, and Operating Efficiency. Many of its margins are a bit tighter than ideal, but its 57.6% gross margin and 23.8% operating margin are quite solid.
Its 25.8% shareholder yield is also highly enticing.
Yet beyond these figures is a 100% BUY rating from Barchart based on short-term, medium-term, and long-term technical indicators, like its
- 20 Day Moving Average
- 20 – 50 Day MACD Oscillator
- 20 – 100 Day MACD Oscillator
- 20 – 200 Day MACD Oscillator
- 50 Day Moving Average
- 50 – 100 Day MACD Oscillator
- 50 – 150 Day MACD Oscillator
- 50 – 200 Day MACD Oscillator
- 100 Day Moving Average
- 150 Day Moving Average
- 200 Day Moving Average
- 100 – 200 Day MACD Oscillator
So if our call on Scorpio as one of the best stocks to buy now, Louis Navellier’s shoutout and its Barchart score aren’t enough to convince you, maybe this figure will be.
In the last month, short interest in Scorpio Tankers has decreased by 15.70%. Despite the stock’s already impressive bull run, investor sentiment continues to improve dramatically.
Breakout be Damned- STNG Remains a STRONG BUY With a 20+% Upside
According to Tipranks, Scorpio is a STRONG BUY because 6 out of 6 Wall Street analysts who offered 12-month price targets for STNG in the last 3 months rated it a BUY. It currently has a high price target of $50.00, a low of $43.00, and an average of $47.17.
While its average price target represents a 13.39% upside from August 31, 2022’s $41.60 close, the $50.00 price target is probably more accurate at this point. That’s because the last two analyst moves on this stock were from B. Riley and BTIG Research in late July, when they boosted their price targets to $50.00.
So when you talk about the best stocks to buy now, STNG and the more likely 20.19% upside have to be considered.
STNG’s year-to-date low and high are $11.02 and $43.77, respectively.
EOG Resources, Inc. (NYSE:EOG)
One of America’s largest oil and natural gas companies could run another 44.27% based on Truist’s recent $175.00 price target.
During Louis Navellier’s Prediction 2022 presentation, he singled out EOG Resources as a “Grade A” and “Strong Buy.”
While he based these claims on his proprietary 8-category rating system, it goes deeper than just one stock guru’s claims.
EOG Resources is a prominent player in the oil, gas & consumable fuels industry and is highly important in this energy market. It is one of the largest oil and natural gas companies in the U.S., and as of December 31, 2021, it had this amount of total estimated net proved reserves.
- 3,747 million barrels of oil equivalent
- 1,548 million barrels (MMBbl) of crude oil and condensate reserves
- 829 MMBbl of natural gas liquid reserves
- 8,222 billion cubic feet of natural gas reserves.
EOG’s primary business is in Texas, including operations in the Permian Basin and over 11,500 drilling sites. It also has properties in New Mexico and Trinidad and Tobago.
EOG is also a company that operates with excellent financial margins and a generous dividend. Beyond this, its earnings and revenue have soared year-over-year and could continue to do so in a market starved for non-Russian sourced oil and gas.
Moreover, the stock rallied over 42.50% thus far in 2022 and could have another 44.27% of room to run based on a Truist Financial $175.00 price target from August 15, 2022.
Earnings and Revenue are Skyrocketing With No Sign of Stopping
EOG Resources posted quarterly earnings data earlier in the month (August 4, 2022). While its $2.74 EPS missed analyst projections by a wide margin, it still marked a 58.38% year-over-year increase. Revenue for the quarter also came in at $7.41 billion, crushing analyst estimates by almost $2 billion and marking a 79.0% year-over-year increase.
Chances are, earnings for EOG Resources will stay this elevated in the coming year, too, especially if net income grows 98.8% over the next 12 months as Finbox projects.
Phenomenal Fundamentals and Dividends at a Surprising Discount
Despite the EOG stock rocketing over 42.50% in 2022, it remains at an attractive discount. It trades with a trailing P/E under 13.0x, while its forward P/E and PEG sit at 7.7x and 0.06, respectively.
That alone makes the stock buyable. But its outstanding fundamentals make it one of the best stocks to buy now.
First, its cash flows can sufficiently cover interest payments, and its valuation implies a 5.4% free cash flow yield.
Second, its 7 out of 9 Piotroski Score indicates healthy Liquid Balance Sheets, Profitability, and Operating Efficiency. Unlike STNG, though, its margins are strong across the board and demonstrate this company’s raw power and efficiency.
The 2.45% dividend yield is enough to make EOG one of the best stocks to buy now. It is especially evident considering the scope and scale of its dividend increase. EOG’s dividend increased for 4 years in a row and by 83.29% over the last 3 years. With its 30.77% payout ratio projected to fall by more than 10% in the next year, watch out. The EOG dividend could potentially surge another 463.6% at a 19.8% 5-year CAGR.
Several Technical Indicators Also Say BUY
While it doesn’t have the same overall 100% BUY rating from Barchart that STNG has, Barchart still gives it 100% BUY rating for its long-term indicators.
Overall, here’s what Barchat says flashes a BUY signal for EOG.
- 20 Day Moving Average
- 20 – 50 Day MACD Oscillator
- 20 – 200 Day MACD Oscillator
- 50 Day Moving Average
- 100 Day Moving Average
- 150 Day Moving Average
- 200 Day Moving Average
- 100 – 200 Day MACD Oscillator
A STRONG BUY Energy Stock With a Potential 44+% Upside
Like STNG, Tipranks rates EOG Resources a STRONG BUY because 11 out of 14 Wall Street analysts who offered 12-month price targets in the last 3 months rated it a BUY. EOG has a street-high price target of $175.00, a low of $119.00, and an average of $150.00. The average price target represents a 23.66% upside from its August 31, 2022, closing price of $121.30.
Many analysts, as of late, see a much higher upside than a $150.00 price target. Truist Financial, roughly two weeks ago (August 15, 2022), gave the stock its street-high $175.00 price target, representing a 44.27% upside.
This month, Mizuho also gave EOG a $167.00 price target, while Barclays gave it a $164.00 price target.
EOG’s year-to-date low and high are $88.29 and $147.99, respectively.
