Are Investors Undervaluing Berry Petroleum (BRY) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Berry Petroleum (BRY). BRY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.21. This compares to its industry's average Forward P/E of 12.92. Over the past year, BRY's Forward P/E has been as high as 9.42 and as low as 3.65, with a median of 7.16.
Investors will also notice that BRY has a PEG ratio of 0.48. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BRY's PEG compares to its industry's average PEG of 0.77. Over the past 52 weeks, BRY's PEG has been as high as 0.63 and as low as 0.24, with a median of 0.48.
We should also highlight that BRY has a P/B ratio of 0.94. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. BRY's current P/B looks attractive when compared to its industry's average P/B of 1.86. BRY's P/B has been as high as 3 and as low as 0.71, with a median of 1.08, over the past year.
Finally, investors will want to recognize that BRY has a P/CF ratio of 4.32. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 5.25. Over the past year, BRY's P/CF has been as high as 5.18 and as low as 3.10, with a median of 4.25.
Value investors will likely look at more than just these metrics, but the above data helps show that Berry Petroleum is likely undervalued currently. And when considering the strength of its earnings outlook, BRY sticks out at as one of the market's strongest value stocks.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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