2. OIL AND GAS
Top Pick: Halliburton (HAL) is an oilfield-services company. Second-quarter profit soared 83% to $480 million, or 52 cents a share, as revenue increased 26%. The operating margin rose from 14% to 17%. Halliburton has $3.1 billion of cash and $4.6 billion of debt, converting to a quick ratio of 2 and a debt-to-equity ratio of 0.5. Halliburton's stock trades at a forward earnings multiple of 14 and a sales multiple of 2 -- 34% and 19% discounts to peer averages. It's expensive based on book value and cash flow. Roughly 94% of analysts rate the stock "buy."
Bullish Scenario: Jefferies (JEF) values Halliburton at $54, suggesting a 59% return.
Three More Top-Ranked Oil and Gas Stocks:Schlumberger (SLB) Occidental Petroleum (OXY) EQT Corp. (EQT)