AIM:PET PE PEG Gauge Feb 26th 18
The oil and gas industry is trading at a PE ratio of 15.04x, relatively similar to the rest of the UK stock market PE of 17.59x. This illustrates a fairly valued sector relative to the rest of the market, indicating low mispricing opportunities. However, the industry returned a lower 6.79% compared to the market’s 11.97%, illustrative of the recent sector upheaval. Since Petrel Resources’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Petrel Resources’s value is to assume the stock should be relatively in-line with its industry.
Next Steps:
Petrel Resources has been an energy industry laggard in the past year. If Petrel Resources has been on your watchlist for a while, now may be a good time to dig deeper into the stock. Although it delivered lower growth relative to its energy peers in the near term, the market may be pessimistic on the stock, leading to a potential undervaluation. However, before you make a decision on the stock, I suggest you look at Petrel Resources’s fundamentals in order to build a holistic investment thesis.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.