GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Diamondback Energy looks cheap against its sales at $189.27. Fair value is $197.99 to $251.99, about 5x mid-cycle sales give or take 12%, and it only becomes expensive above $313.49; trailing and forward reads differ by 40%, widening the range. The view rests on valuation levels from reported earnings and revenue estimates, not fundamental work. x.comÂ
Low forward earnings multiples alongside strong investor sentiment put these S&P 500 stocks atop the smart-value ranking. APA, Viatris, EOG, Marathon Petroleum, Valero, Phillips 66, Allstate, Diamondback, Everest and Centene trade at 6-15x forward earnings after one-year gains of 17-150%; the accompanying ranking also weighs free-cash-flow yield and momentum. x.comÂ
Coherent and Diamondback Energy are boring compounders that sit in the actual infrastructure of the AI and energy buildout. For Coherent, hyperscaler data center capex has not peaked. Diamondback generated $1.2 billion of free cash flow in a single quarter. x.comÂ
Energy stocks remain undervalued because shale depletion is real and AI needs natural gas, and the market is underpricing both. Diamondback Energy has quietly been doing tender offers ahead of its May 4 earnings, and EQT's 3.84% drop does not change the thesis. Value takes time. x.comÂ
Diamondback Energy, Coherent, Kaspi.kz and MercadoLibre suit a market where private credit is cracking and rates stay high. Blue Owl halted redemptions at a major credit fund, Blackstone injected $400M to meet withdrawals and BlackRock limited withdrawals from a $26B vehicle. Loans made at near-zero rates face higher refinancing costs as $98 oil from the Hormuz closure limits Fed cuts, while PIK interest masks deterioration. Credit tightening has historically preceded equity market stress. x.comÂ
Greenfire Resources is cheap, has growth ahead of it and will do more acquisitions. Per @NoonHillCapMgmt, it trades at about 4x 2027 adjusted EBITDA of C$470M at $70 WTI on a C$2.75B enterprise value, which hedges can lock in, and management believes it can double production. It trades at about 81k per flowing barrel versus Athabasca's 150k for similar production and growth. x.comÂ
EOG Resources is deeply undervalued on EV/EBITDA, a big discount given where oil prices are now, and the chart looks strong. x.comÂ
US energy stocks are being steadily accumulated after a 17-year base, and that base will not resolve in a month. The sector broke out this year and pulled back on contracting volume, which is digestion, not distribution. Energy trades near 13x earnings versus about 20x for hyperscalers. Stocks now rise with oil and get bought back when oil falls. Tech is priced for the cost of capital to come down; energy for the reason it will not. x.com x.com x.comÂ
Occidental Petroleum is mispriced at about 8.4x trailing earnings and an 8.7% free cash flow yield during an oil shock. Eight times earnings in an oil shock is not a valuation but a clerical error with a ticker symbol. Iran cannot beat the US Navy, so it is waiting out America's vote in 49 days, since Iran does not vote until 2028; owning Occidental beats hiding in Treasuries. x.comÂ
