Last year was a rough one for crude with the commodity posting an annual drop of 31%. So far, this year promises to be more of the same. Having already reached its lowest levels in nearly 13 years, it could be quite a while yet before oil finds its way up again. While there’s likely more pain ahead, there’s also a high chance that one could make money in stocks – that is if you have the stomach to be a buyer. Opportunity Knocks for Intelligent Investors Now for that awkward business of actually selecting the companies. One of the ways to get it right is to select beaten down stocks. Stressed valuations do not always indicate that the stock has lost all potential. In fact, some could actually make a great buy. But prospective investors need to do adequate research before betting one’s hard-earned money on such stocks. In particular, we have shortlisted 4 companies that HAVE the following credentials: Zacks Rank #2 (Buy) and trading at or near their 52-week lows. Apache Corp. APA: Founded in 1954, Apache is one of the world's leading independent energy companies engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. The Houston, TX-based oil and gas finder has surprised earnings to the upside in each of the last four quarters. What’s more, Apache's recently undertaken restructuring initiatives and cost cutting measures should enable the company to better its earnings performance in the future. Comstock Resources Inc. CRK: Another upstream player, Frisco, TX-based Comstock Resources’ large acreage position in the prolific Haynesville/Bossier Shale play provides a multi-year inventory of low-risk development drilling opportunities. In fact, even in this difficult operating environment, the Zacks Rank #2 company’s Haynesville program continues to achieve excellent results. Supplemented with a low cost structure, Comstock remains well positioned to maintain a strong growth trajectory in the near- to medium-term. The company's decision to suspend its dividend might have shocked income investors but it has provided much needed stability to the balance sheet. Finally, a significant reduction in lifting costs has resulted in major savings for the operator. McDermott International Inc. MDR: Despite the weak commodity pricing environment, McDermott International has maintained its excellent track record of earnings surprise history, beating estimates handily in each of the last four quarters. This leading global energy-focused engineering and construction firm has embarked on a major cost savings initiative to shore up its finances and turn around. Among other positives, McDermott received a large number of new contacts of late, thus adding to its already robust backlog. Though some investors might be worried about the company's immediate future due to the cyclical downturn across the markets it serve, we believe McDermott's broad product portfolio insulates the operations to a large extent Transocean Ltd. RIG: Transocean offers unmatched levels of earnings and cash flow visibility, given its technologically advanced and versatile offshore drilling fleet, strong backlog and considerable pricing power. The company has been selling/stacking older rigs as well as investing in high-specification rigs in order to improve the quality of its fleet. As such, it is expected to emerge a winner despite the current downturn. Moreover, the settlement of a host of civil/criminal claims associated with the Macondo incident has also eased the overhang on the stock. We further appreciate Transocean’s consistent initiatives to lower its operating cost, especially in an unfavorable business environment. Bottom Line The greatest opportunities could be found by buying fundamentally sound stocks when everyone is selling them. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MCDERMOTT INTL (MDR): Free Stock Analysis Report TRANSOCEAN LTD (RIG): Free Stock Analysis Report APACHE CORP (APA): Free Stock Analysis Report COMSTOCK RESOUR (CRK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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