Keep an Open Mind

I have recently discussed how energy stocks are one of the few truly cheap sectors of the stock market. In addition to the large drop in natural gas prices, which has gotten all the headlines, oil prices weakened in the second quarter as well. Oil initially declined by roughly 28% before rebounding in the past few weeks. On the New York exchanges they are still roughly 20% off the highs for the year. Performance numbers for the exploration and production companies as well as the oil service stocks have followed pretty much the same track as the commodities. The price weakness has sent me scouring the oil sector for ideas.

It is no secret that I make my stock selections based on underlying asset value. I do not usually pay a lot of attention to price-to-earnings (PE) ratios or analyst forecasts. I find them to be unreliable indicators of absolute value so I pretty much ignore them. This doesn't mean they are wrong or that others can't successfully use them to pick stocks. I do try to be pretty open-minded, so when I received an email from Professor Mark McNabb (also known as the Voo-Doo Prof) with some earnings growth compared to PE stock picks, I looked a little deeper....496 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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