BOS GLOBAL Holdings Limited (AIM:BOS), a GBP£3.81M small-cap, is an oil and gas company operating in an industry which has persevered through an extended oil price slump since 2014. However, energy-sector analysts are forecasting for the entire industry, an extremely robust growth of 74 percent in the upcoming year, and an enormous triple-digit earnings growth over the next couple of years. However this rate still came in below the growth rate of the UK stock market as a whole. An interesting question to explore is whether we can we benefit from entering into the oil and gas sector right now. Below, I will examine the sector growth prospects, and also determine whether BOS is a laggard or leader relative to its energy sector peers. See our latest analysis for BOS

What’s the catalyst for BOS's sector growth?

The oil price collapse triggered a wave of cost reduction among energy businesses as the sector as a whole faced negative growth over the past five years. Large energy businesses have slashed their growth expenditures by over 40 percent since the collapse, and reduced headcount by nearly half a million workers. In the past year, the industry delivered negative growth of -7 percent, underperforming the UK market growth of 451 percent. BOS leads the pack with its impressive earnings growth of 24 percent over the past year. This proven growth may make BOS a more expensive stock relative to its peers.

Is BOS and the sector relatively cheap?

The oil and gas industry is trading at a PE ratio of 31 times, relatively similar to the rest of the UK stock market PE of 30 times. This illustrates a fairly valued sector relative to the rest of the market, indicating low mispricing opportunities. However, the industry returned a lower 4 percent compared to the market’s 19 percent, illustrative of the recent sector upheaval. Since BOS’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge BOS’s value is to assume the stock should be relatively in-line with its industry.

What this means for you:

Are you a shareholder? BOS recently delivered an industry-beating growth rate in earnings, which is a positive for shareholders. If you’re bullish on the stock and well-diversified by industry, you may decide to hold onto BOS as part of your portfolio. However, if you’re relatively concentrated in oil and gas, you may want to value BOS based on its cash flows to determine if it is overpriced based on its current growth outlook.

Are you a potential investor? If BOS has been on your watchlist for a while, now may be the time to enter into the stock, if you like its ability to deliver growth and are not highly concentrated in the oil and gas industry. However, before you make a decision on the stock, I suggest you look at BOS’s future cash flows in order to assess whether the stock is trading at a reasonable price, as well as other important fundamentals such as the company’s financial health in order to build a holistic investment thesis.

For a deeper dive into BOS GLOBAL Holdings's stock, take a look at the company's latest free analysis report to find out more on its financial health and other fundamentals. Interested in other energy stocks instead? Use our free playform to see my list of over 300 other oil and gas companies trading on the market.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.