These oil stocks are looking cheap as Exxon Mobil reportedly mulls a bid for Pioneer

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Many oil companies may be acquisition targets for industry giants

Pioneer Natural Resources is in play, with the Wall Street Journal reporting that Exxon Mobil is close to making a bid to buy out its smaller competitor. So that raises the question: which other oil companies might be undervalued in this market?A $60-billion takeout would be a 20% premium to Pioneer’s market value at the close on Oct. 5, according to FactSet. Below is a screen of energy stocks to see which ones might be valued at similar levels.

Exxon is the largest U.S. oil producer. The company had $29.6 billion in cash and equivalents as of June 30, and its ratio of long-term debt to equity is 19%. Over the past four quarters through June, Exxon’s profit totaled $51.7 billion. During that period the company spent $17.9 billion on share buybacks, underscoring its financial flexibility.

For an expanded screen, we began with a list of 71 stocks in the S&P Composite 1500 Index’s energy sector. The S&P 1500 is made up of the S&P 500 SPX, the S&P 400 Mid Cap Index MID and the S&P Small Cap 600 Index SML.

 

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