We recently published a list of 12 Best Oil and Gas Penny Stocks to Invest in Now. In this article, we are going to take a look at where Oil States International, Inc. (NYSE:OIS) stands against other best oil and gas penny stocks to invest in now.
The oil and gas sector faces a pivotal moment in 2025 as it deals with complex dynamics from global tensions, evolving policy directions, and rising innovation. The stable pricing in 2024, after many decades, now faces hurdles due to geopolitical stresses, energy transition demands, and economic shifts. Companies are keeping tight capital control while boosting tech productivity, as analysts predict oil will stay between $70 and $80 per barrel. However, geopolitical instability and unpredictability could push prices higher.
Despite these obstacles, operations have advanced as the sector’s capital spending has increased 50% from 2020. Meanwhile, returns are on the upswing as businesses focus on high-performing assets and refine their portfolios. Many companies are betting on digital and green tech—carbon capture, hydrogen, and data-driven exploration—as part of a wider clean energy push. Global oil trade issues have shifted focus to natural gas as a second key revenue source, thus, gas prices have jumped lately. According to Yahoo Finance data, LNG futures are up nearly 40% in six months and 91.65% year-over-year at Henry Hub, thanks to low stockpiles, winter demand, and rising LNG exports.
Although market instability persists, as recent OPEC+ supply boost and US-China trade tensions have pushed down crude prices. As of April 2025, West Texas Intermediate (WTI) crude sits near a three-year low of $61.5 per barrel. The US Energy Information Administration (EIA) sees an average of $63.88/bbl this year, further dropping to $57.48 in 2026. This decline, plus tariff hurdles and export problems, might squeeze US oil output since profit thresholds sit between $61-$70/bbl. This shows how even major forecasters are scaling back amid trade fights and project holdups.
Now, the trend has shifted to natural gas as the growth driver for the oil and gas industry. Europe remains central to global LNG trade, taking 55% of US LNG exports in 2024, per LSEG data. As seen last December, 69% of US LNG shipments (5.84 MT) went to Europe, up from November’s 5.09 MT, driven by winter needs and limited Russian supply. As trade tensions add complications, China’s 15% tariff on US LNG threatens new deals despite existing contracts.
The outlook is mixed but hopeful as oil demand rebounds post-pandemic and a global boost in energy diversification. Although solar energy helps reduce fossil fuel dependence, it won’t replace it entirely, which shows the significance of a harmonized energy mix. In the same way, the main alternatives—solar, wind, and nuclear—each have scaling or consistency limits. Oil and gas, especially natural gas, remain vital to global growth and energy security, creating openings for agile, cost-effective penny stocks.
While major companies grab headlines with billion-dollar projects, penny stocks—small-cap oil and gas companies trading under $5—attract interest for their high-growth potential.
Our Methodology
We first sifted through ETFs, online rankings, and internet lists to compile a list of the best oil and gas stocks under $5. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. For tied stocks, we ranked them by the value of their hedge fund stakes. The hedge fund data was sourced from Insider Monkey’s database, which tracks the moves of over 1000 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An offshore oil installation platform, its production arm reaching out to the horizon.
Oil States International, Inc. (NYSE:OIS)
Number of Hedge Fund Holders: 21
Share Price as of April 16: $3.42
Oil States International, Inc. (NYSE:OIS) supplies advanced equipment and products for oil and gas operations like completion, production, and offshore drilling. The company works across three segments: Completion and Production Services, Downhole Technologies, and Offshore Manufactured Products. It serves energy, industrial, and defense markets worldwide, offering solutions including riser systems, perforation tools, and subsea infrastructure.
In Q4 ending December 31, 2024, Oil States International, Inc. (NYSE:OIS) reported $165 million in revenue and $19 million in adjusted EBITDA, driven by robust offshore demand. It beat expectations with $0.09 earnings per share while generating $18 million in operating cash and gaining $15.3 million pre-tax from selling an unused facility. For 2025, the company forecasts revenue of $700-735 million, EBITDA of $88-93 million, free cash flow of $40-50 million, and about $25 million in CapEx.
Furthermore, Oil States’ offshore-manufactured products grew 5% in Q4, bringing in $107 million. International and offshore revenue makes up 72% of the company’s portfolio, while U.S. land operations account for just 28%, demonstrating a critical focus on profitable markets. Oil States International, Inc. (NYSE:OIS) cut underperforming U.S. operations, trimming $41 million in revenue for 2024 but boosting efficiency.
Oil States International, Inc. (NYSE:OIS) is pushing tech-driven growth through managed pressure drilling systems and flex joint connectors. Its open architecture perforating tools are gaining ground in Latin America and Eastern markets. With solid financials and growing international contracts, this stock stands out among the best penny stocks.
Overall, OIS ranks 5th on our list of best oil and gas penny stocks to invest in now. While we acknowledge the potential of OIS as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than OIS but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.