Newfield Exploration Co. (NFX)

[Timothy Smith]

7 reasons NFX has significant upside from $31 a share:

Even though the company missed earnings this quarter on both the top and the bottom lines, it guided production estimates up. It is also a leading player in the rapidly expanding Utica Shale.

The company is selling at the bottom of its five year valuation range based on P/E, P/B, P/S and P/CF.

After falling for months, consensus estimates for both FY2012 and FY2013 have stabilized in the last week or so.

The stock is cheap at just 10 times forward earnings and has a five year projected PEG of under 1 (.76).

Oil and Gas Liquid production grew 40% Y/Y in the second quarter and now represents around 50% of total production.

The stock looks like it finally hit a long term bottom and recently turned up.

And my favorite reason....

NFX is selling at just 95% of book value and is selling at under 3 times FY2011's operating cash flow. The stock's median price target is $42 from the 20 analysts that cover the stock.