12 Most Undervalued Stocks to Invest in for Under $20

6) NOV Inc. (NYSE:NOV)

Forward P/E as of January 17: 8.7x

Share Price as of January 17: $15.62

Number of Hedge Fund Holders: 34

NOV Inc. (NYSE:NOV) is engaged in designing, constructing, manufacturing, and selling systems, components, and products for oil and gas drilling and production, and industrial and renewable energy sectors. Also, the company manufactures and supplies equipment utilized in the drilling of natural gas wells, including rigs, drill pipes, and other related technologies. There is a potential for NOV Inc. (NYSE:NOV) to benefit from secular themes like a resurgence in demand for natural gas. Furthermore, its strong position in international markets is expected to offer a buffer against regional downturns.

With countries focusing on transitioning to cleaner energy sources, natural gas is being preferred because of its lower carbon emissions as compared to coal and oil. This shift can fuel increased investment in natural gas exploration and production. NOV Inc. (NYSE:NOV)’s expertise in offering equipment for both onshore and offshore drilling places it well to capitalize on these promising trends. The company is expected to see elevated demand for its specialized natural gas extraction and processing equipment, resulting in increased order volumes and better pricing power.

Furthermore, a natural gas boom is expected to result in the development of new gas fields, mainly in regions with underdeveloped resources. This will create opportunities for NOV Inc. (NYSE:NOV) to expand its global footprint. Hotchkis & Wiley Funds, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:

“NOV Inc. (NYSE:NOV) is a leading provider of oilfield capital equipment, consumables, and services. Like APA, the downturn in energy prices has reduced oilfield activity below sustainable levels, impacting NOV’s sales and profitability. As activity rebounds, most of NOV’s product lines should experience significant increases in volume and pricing. In the longer term, the earnings power of its Rig Aftermarket business should improve, given its large installed base.”