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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is SM Energy (SM - Free Report) . SM is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 4.82, which compares to its industry's average of 8.84. Over the past 52 weeks, SM's Forward P/E has been as high as 8.92 and as low as 4.35, with a median of 5.88.
We should also highlight that SM has a P/B ratio of 1.10. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.27. Within the past 52 weeks, SM's P/B has been as high as 1.64 and as low as 1.03, with a median of 1.30.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SM has a P/S ratio of 1.8. This compares to its industry's average P/S of 2.13.
Finally, investors will want to recognize that SM has a P/CF ratio of 2.85. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.18. Over the past year, SM's P/CF has been as high as 4.21 and as low as 2.67, with a median of 3.30.
These figures are just a handful of the metrics value investors tend to look at, but they help show that SM Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SM feels like a great value stock at the moment.
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Should Value Investors Buy SM Energy (SM) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is SM Energy (SM - Free Report) . SM is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 4.82, which compares to its industry's average of 8.84. Over the past 52 weeks, SM's Forward P/E has been as high as 8.92 and as low as 4.35, with a median of 5.88.
We should also highlight that SM has a P/B ratio of 1.10. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.27. Within the past 52 weeks, SM's P/B has been as high as 1.64 and as low as 1.03, with a median of 1.30.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SM has a P/S ratio of 1.8. This compares to its industry's average P/S of 2.13.
Finally, investors will want to recognize that SM has a P/CF ratio of 2.85. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.18. Over the past year, SM's P/CF has been as high as 4.21 and as low as 2.67, with a median of 3.30.
These figures are just a handful of the metrics value investors tend to look at, but they help show that SM Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SM feels like a great value stock at the moment.