Over the last 12 months EOG is up 49.2% while the market is up 16.7%.
In fact, over the past three months, this stock is up 18.5% while the market is down 1.3%. So EOG gets very good momentum and performance grades as compared to other 3,500 investments that I track on a daily basis.
I love stocks that are performing for its shareholders because that tells me there is probably good management at the company.
While the CEO is probably doing quite well himself, he's also doing quite well for his shareholders. It's hard to be an angry shareholder when the CEO is making money for you! In my mind that's the number one job of a CEO--to treat their shareholders with some good returns over the years.
How about the valuation of EOG? Just like I've seen a lot of cheap stocks that don't have good performance, I've also seen a lot of stocks flying around with great performance, but trading at astronomical prices. This scares me!
I was around in 2000 when the high-flying dot-com stocks were trading at triple-digit PE ratios and crashing back to earth, so I pay keen attention to valuation.
Data from Best Stocks Now App
EOG is currently trading at 17.8 times forward earnings. The market is currently trading at an average of about 18 time's forward earnings, so EOG is trading at a slight discount to the overall market.
When I take EOG's earnings estimates of $8.83 per share for the next year, extrapolate that out over the next five years at annual estimated growth rate of 18%, and apply a multiple that I think is appropriate, I find a stock that still has 85% upside potential!
: Lastly, let's not forget to check EOG's one-year stock chart. I'm looking for a stock that is not falling, in a sideways trend, or starting to rollover! When we look at EOG, we see a very strong stock chart!
Courtesy of StockCharts.com
It is very important to always be in the right area of the market at the right time. I don't think there is anyone out there who has been an investor and hasn't been caught in the wrong place at the wrong time. With oil prices rising fast, the energy stocks look very good once again!