Continental Resources’ President and COO Is Buying

EOG Resources Inc (NYSE:EOG), Kodiak Oil & Gas Corp (NYSE:KOG), Whiting Petroleum Corp (NYSE:WLL), and Northern Oil & Gas, Inc. (NYSE:NOG) make a good peer group for Continental. EOG is the only one of these stocks trading at a premium on a trailing earnings basis. It experienced a 16% increase in sales last quarter compared to the fourth quarter of 2011, but even expectations of continued improvements bring it to a higher forward P/E than Continental. As a result we don’t think it’s as good a buy. Whiting reported double-digit growth rates on both top and bottom lines last quarter compared to the same period in the previous year, and it is arguably in value territory at a trailing P/E of 14. This matches up well with large oil majors in our opinion. Kodiak and Northern are both Bakken-focused, though considerably smaller than Continental in terms of market cap. Their PEG ratios are even lower, at 0.3, as they too are expected to see very high growth rates over the next several years yet have lower earnings multiples than Continental.

As such while we are certainly interested in Continental- particularly with this insider purchase- Kodiak and Northern might offer more of an upside for investors who like the Bakken’s prospects. They look like good starting points for further research, though if issues arise we could certainly see Continental as an energy pick based on its fundamentals.

Disclosure: I own no shares of any stocks mentioned in this article.