The outlook for John Wood Group (LSE: WG) was given a boost today with the company announcing a double contract win in the Middle East. The Group has secured two new, three-year contracts which are collectively valued at over $140m. They will see the company deliver technical services and expertise to one of the world’s leading international oil companies in Iraq, with operations such as project management, procurement services and brownfield front-end engineering design.

With John Wood Group trading on a price-to-earnings (P/E) ratio of 14, it seems to offer good value for money. And while its bottom line is forecast to fall by 26% this year, this seems to have been priced in by the market following the company’s share price fall of 11% in the last year. With earnings growth due to return next year and it yielding 3.7% from a dividend which is covered 1.9 times by profit, it seems to be a good buy. However, gains of 50% in 2016 may be overly optimistic given the near-term challenges it faces.

Weakness begins to bite

Similarly, a 50% rise in the share price of oil and gas support services company Hunting (LSE: HTG) may not be achieved in 2016. That’s at least partly because it is forecast to post a loss in the current year as weakness in the wider oil and gas sector begins to bite. In fact, Hunting’s bottom line is set to be in the red for a second consecutive year in 2016 which has the potential to push its share price lower in the short run following a 41% fall last year.

Despite this, Hunting’s shares could offer capital gains in the long run. That’s because the company is expected to return to profit next year and if it can continue to keep its bottom line in the black then investor sentiment could improve. However, with Hunting trading on a forward P/E ratio of 40, it appears to be relatively overvalued at the present time.

Improving outlook

Meanwhile, BHP Billiton (LSE: BLT) has already risen by 22% in the last three months as an improving outlook for the commodities sector has caused investor sentiment to pick up. This trend could continue over the medium-to-long term since the current supply/demand imbalance in the iron ore and oil market is likely to return to equilibrium in the coming years as producers go out of business and demand from the emerging world picks up.

With BHP Billiton forecast to more than double its pre-tax profit next year, there’s likely to be a significant improvement in investor sentiment towards the diversified mining company. This could lead to major share price gains of 50% or more since BHP Billiton currently has a price-to-earnings growth (PEG) ratio of just 0.2. And with it being financially sound and well-diversified, it seems to offer an excellent risk/reward ratio.

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Peter Stephens owns shares of BHP Billiton. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.