Are Investors Undervaluing Crescent Point Energy (CPG) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Crescent Point Energy (CPG). CPG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.17. This compares to its industry's average Forward P/E of 13.36. CPG's Forward P/E has been as high as 25.41 and as low as -16.13, with a median of 10.06, all within the past year.
Another valuation metric that we should highlight is CPG's P/B ratio of 0.45. 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 0.82. Over the past year, CPG's P/B has been as high as 0.52 and as low as 0.22, with a median of 0.35.
Finally, investors will want to recognize that CPG has a P/CF ratio of 0.97. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 2.89. Over the past year, CPG's P/CF has been as high as 3.21 and as low as 0.65, with a median of 0.90.
These are just a handful of the figures considered in Crescent Point Energy's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CPG is an impressive value stock right now.
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