Unit Corp (UNT)

pencils2 (99.76) Submitted: 8/15/06 7:02 PM : Start Price: $54.95 UNT Score: -22.31

I really don't see how this company isn't undervalued. The P/E is half of the industry average (note that this is a hot industry right now, and will continue to be as long as gasoline stays near current levels, and I think it will), the PEG is very low (.28), and analysts are expecting nearly 30% annual growth. If we assume just a 20% annual growth rate for the next five years, and a P/E of just 15 (still less than the industry average), we would have ourselves a 33% annual rate of return on an investment from today's prices. And this is with low expectations with growth and the P/E, so I think this is a true bargain investment for the long-term. This is a true Peter Lynch stock, as he liked companies with a growth rate of 20%-25% trading at a PEG of less than .5. Unit is the closest company I've seen to that, and I expect this company to smash the S&P 500 returns over the next five years.

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