AAV and HWX: Are these 2 TSX oil and gas stocks under $10 a buy?

Highlights

• The S&P/ TSX Energy Index jumped roughly three per cent on Monday, July 4
• The TSX Composite Index gained by nearly one per cent this day
• Some small-cap stocks like Advantage (TSX: AAV) and Headwater (TSX: HWX) were among the top ten gainers

Canadian oil and gas stocks led the sector-specific S&P/ TSX Energy Index to jump by roughly three per cent on Monday, July 4, which derived the TSX Composite Index to the green territory with a gain of nearly one per cent this day.

TSX energy stocks like Advantage Energy (TSX: AAV) and Headwater Exploration (TSX: HWX), which presently are priced under C$ 10 each, were among the top gainers with an increase of over eight per cent and six per cent, respectively, in their stock prices. 

Such smallcap stocks could provide significant growth to investors by offering exposure to the global oil and gas market. Keeping this in mind, let us explore these two TSX energy stocks.

Advantage Energy Ltd (TSX: AAV)

Advantage Energy reported a quarter-over-quarter (QoQ) rise of 10 per cent in quarterly production, with 52,946 barrels of oil equivalent per day produced in Q1 2022. The smallcap oil production company posted natural gas and liquids sales of C$ 177.56 million in Q1 2022, notably up from C$ 99.37 million in the same quarter a year ago.

AAV stock swelled by nearly 75 per cent in the past 12 months. According to Refinitiv findings, Advantage Energy appears to be on a bearish trend as its stock price dropped by almost 28 per cent from a 52-week high of C$ 12 (June 8), with a Relative Strength Index (RSI) of 42.99 on July 4.

Headwater Exploration Inc (TSX: HWX)

Headwater Exploration reported a 376 per cent growth to C$ 110.02 million in total sales (net of blending) in Q1 2022 on a year-over-year (YoY) basis. Headwater posted a net profit of C$ 42.36 million in the latest quarter, significantly higher than C$ 12.79 million in Q1 2021.

HWX stock zoomed by roughly 37 per cent in a year. As per Refinitiv findings, Headwater held an RSI value of 37.51 on July 4 (up from the oversold mark of 30).

Bottomline

Smallcap stocks could be riskier ventures than mid-cap and large-cap stocks. But some healthy stocks that have noted growing revenue and profit over a course of time can provide substantial growth exposure to investors.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.