10 Energy Stocks Trading at Deep Discounts

NEW YORK (TheStreet) -- BP plc (BP), Total (TOT), China Petroleum & Chemical (Sinopec) (SNP), Yingli Green Energy Holding (YGE), LDK Solar (LDK) and ReneSola (SOL) are among the cheapest energy stocks.

The current upswing in crude oil prices may support energy stocks to outperform broader markets during the upcoming weeks. Year-to-date, the S&P 500 Index gained 4.6%, while the S&P 500 Energy Index surged 12.0%.

In the current market environment of volatile oil prices, the following 10 energy stocks are trading at deep discounts, offering bargain opportunities to investors. These stocks are selling at price-to-projected-earnings ratio of less than 9, while the S&P 500 index is trading at a PE ratio of 15.6.

In comparison, Exxon Mobil ( XOM), Chevron ( CVX), ConocoPhillips ( COP), Apache ( APA) and Suncor Energy ( SU) have forward price-to-earnings multiples in the range of 9.3-18.5.

The following 10 energy stocks have buy ratings in the range of 40%-82% and are expected to gain up to 56% over the next 12 months with a mean upside value of around 21%, according to analysts polled by Bloomberg.

The stocks are ordered from cheap to cheapest based on forward earnings multiples.

10. Royal Dutch Shell ( RDS.B), an independent oil and gas giant, explores, produces and refines petroleum.

Analysts polled by Bloomberg expect the company to report earnings of 95 cents per share for 2011 first quarter, compared to 89 cents per share in the year-ago period. Earnings per share are forecast at $3.84 for 2011 and $4.37 for fiscal 2012, up from $3.28 per share reported for 2010.

The stock received 75% buy ratings from three of the four analysts covering the stock, while one analyst rated a hold. In comparison, Exxon Mobil ( XOM), Petrobras ( PBR), Chevron ( CVX) and ConocoPhillips ( COP) have buy ratings of 38%, 61%, 72% and 48%, respectively.

Data from Bloomberg has analysts forecasting an average price target of $81.8, up 16% from the current level. The stock is trading at a forward price-to-earnings multiple of 8.8. The stock returned around 33% in the past one year.

9. Total ( TOT) is an integrated oil and gas company operating in more than 130 countries.

Analysts polled by Bloomberg expect the company to report earnings of $1.27 per share for 2011 first quarter, surpassing $1.17 and 90 cents per share reported for the year-ago and quarter-ago periods. Earnings per share are pegged at $5.15 for 2011 and $5.46 for 2012, up from $4.71 reported for 2010.

The stock's return-on-equity was 18.7% during the past 12 months, whereas Suncor Energy ( SU), Repsol YPF ( REP), Marathon Oil ( MRO) and Hess ( HES) had ROEs of 10.1%, 9.9%, 6.8% and 14.1%, respectively.

Of the six analysts covering Total, three recommend buying, while three rated a hold, representing 50% buy ratings. Analysts surveyed by Bloomberg assign an average price target of $64.1, 10% higher than the current level. The stock is trading at a forward price-to-earnings multiple of 8.3.

8. China Petroleum & Chemical (Sinopec) ( SNP) is an integrated energy and chemical company with upstream, midstream and downstream operations.

The stock is trading at an attractive forward PE multiple of 8.2, in comparison to Petro China's ( PTR) 12.4 and CNOOC's ( CEO) 12.4.

Sinopec foresees increasing oil demand in China, as the country outlines plans to boost economic growth going forward The country has surpassed the U.S. as the largest oil consumer last year, according to an International Energy Agency report. A decade earlier, China accounted for only about half of the U.S.'s energy consumption.

Of the four analysts covering Sinopec, three recommend buying, while one suggests holding, representing 75% buy ratings. Analysts expect the stock to gain around 20% over the next 12 months with a consensus target price of $123.8.

7. Yingli Green Energy Holding ( YGE) designs, manufactures, and sells photovoltaic modules.

The company reported earnings of 52 cents per share for 2010 fourth quarter, in comparison to earnings of 44 cents per share and loss of 4 cents per share in the quarter-ago and year-ago periods, respectively. For full-year, earnings per share were $1.35 for 2010, a significant turnaround from loss of 48 cents per share reported for 2009.

The stock's return-on-equity was 19.1% during the past 12 months, whereas JinkoSolar Holding ( JKS), Suntech Power Holdings ( STP) and SunPower ( SPWRA) had ROEs of 18.1%, 6.1% and 11.8%, respectively.

Of the 30 analysts covering Yingli Green Energy, 15 recommend buying, 11 suggest holding and 4 rate selling. Analysts polled by Bloomberg expect the stock to gain an average 15% over the next 12 months.

At $12.9, the stock is currently trading at a forward PE multiple of 7.9 and EV-to-EBITDA ratio of 4.7.

6. Eni S.p.A. ( E) is an integrated Italian oil and natural gas company. Active in Italy, Africa, North Sea, Gulf of Mexico, Kazakhstan and Australia, the company generates and trades electricity, refines oil and operates gasoline service stations.

For 2010 fourth quarter, the company reported earnings of 15 cents per share against 20 cents and 47 cents per share in the year-ago and quarter-ago periods, respectively. For full-year 2010, earnings per share were $1.74, up from $1.15 per share reported for 2009. For 2011, earnings per share are pegged at $2.17 and $2.34 for 2012, as per analysts polled by Bloomberg.

The stock is trading at an attractive forward PE multiple of 7.8, while Imperial Oil ( IMO), Tenaris ( TS), and Statoil ( STO) have PE multiples of 17.1, 25.5, and 9.3, respectively.

Data from Bloomberg has analysts predicting an average 12-month target price of $56.8, up 22% from the current level. Of the five analysts covering Eni, two recommend buying and three suggest holding.

5. Trina Solar ( TSL) is an integrated solar-power products manufacturer including photovoltaic wafers, ingots, cells and modules.

The company reported For 2010 fourth quarter, earnings came in at $1.87 per share, compared to 74 cents per share and $1.08 per share reported for the year-ago and quarter-ago periods, respectively. For full-year, earnings per share were $4.18 for 2010, up from $1.68 per share reported for 2009.

The stock's return-on-equity was 33.7% during the past 12 months, whereas China Sunergy ( CSUN), Solarfun Power Holdings ( SOLF) and First Solar ( FSLR) had ROEs of -5.8%, -5.9% and 30.7%, respectively.

The stock has potential upside of 18% over the next 12 months and consensus target price of $35.6, analysts polled by Bloomberg say.

The stock's current forward PE multiple is 7.5 and EV-to-EBITDA multiple is 5.1. Of the 32 analysts covering the stock, 26 recommend buying, 3 suggest holding and 3 rate selling.

4. BP plc ( BP) is an energy giant with presence in more than 80 countries. The company operates in two segments: exploration and production of oil and natural gas, and refining and marketing of petroleum products.

The company reported earnings of 30 cents per share for 2010 fourth quarter, up from 23 cents per share and 9 cents per share reported for the year-ago and quarter-ago periods, respectively. Going forward, earnings per share are pegged at $1.10 for 2011 and $1.14 for 2012, up from the 20 cents loss for 2010, largely attributable to the Gulf oil spill, analysts polled by Bloomberg reveal.

At $47.03, the stock is trading at an attractive price-to-earnings multiple of 7.3. In comparison, Exxon Mobil, Chevron, Occidental Petroleum ( OXY), and Apache ( APA) are trading at PE multiples of 11.7, 9.3, 13.9 and 10.9, respectively.

According to analysts polled by Bloomberg, the stock has 15% upside over the next 12 months with a consensus target price of $54.2. Of the 13 analysts covering the stock, 8 recommend buying while 5 advise holding.

3. LDK Solar ( LDK) manufacturers and sells multicrystalline solar wafers to manufacturers of solar cells and modules.

Earnings for 2010 third quarter came in at 72 cents per share, compared to 27 cents per share and 36 cents per share reported for the year-ago and quarter-ago periods, respectively.

During the past 12 months, the stock surged around 124.2%, while Daqo New Energy ( DQ), Canadian Solar ( CSIQ) and MEMC Electronics Materials ( WFR) returned around -21.1%, 12.5%, and 5.5%, respectively.

Of the 22 analysts covering the stock, 9 recommend buying, 8 suggest holding, while 5 advise selling. The stock has 8% upside over the next 12 months with a consensus target price of $14.9, analysts polled by Bloomberg predict.

At $13.8, the stock is currently trading at a forward PE multiple of 7.1 and EV-to-EBITDA ratio of 7.9.

2. China's ReneSola ( SOL) is a leading global manufacturer of solar wafers and solar power products.

According to analysts polled by Bloomberg, ReneSola is likely to report earnings of 72 cents per share for 2010 and $1.40 per share for 2011, a significant turnaround from losses of 42 cents in 2008 and 43 cents in 2009.

Of the 15 analysts covering the stock, 11 recommend buying, 3 holding, while 1 advises selling. Over the past one year, the stock's return was a stellar 139%. The stock has 56% upside over the next 12 months with a consensus target price of $18.3, according to analysts polled by Bloomberg.

The stock is trading at an attractive forward PE multiple of 6.0. In comparison, Kyocera ( KYO), Suntech Power Holdings and Canadian Solar are trading at higher PE multiples of 13.9, 16.6 and 10.8, respectively.

1. JA Solar Holdings ( JASO) designs, develops, manufactures and markets high-performance solar energy products in the People's Republic of China.

JA Solar's return-on-equity was 31.2% during the past 12 months, while close contenders First Solar, JinkoSolar Holding, China Sunergy and Ascent Solar Technologies ( ASTI) had ROEs of 30.7%, 18.1%, -5.8% and -14.2%, respectively.

The stock is currently trading at an attractive forward price-to-earnings multiple of 5.4 and EV-to-EBITDA ratio of 4.2.

Of the 23 analysts covering the stock, 14 recommend buying, 5 suggest holding, while 4 advise selling. The stock has 31% upside over the next 12 months with a consensus target price of $10.0, analysts polled by Bloomberg forecast.

>To see these stocks in action, visit the 10 Energy Stocks Trading at Deep Discounts portfolio on Stockpickr.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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