Are Investors Undervaluing Enerplus (ERF) Right Now?
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Enerplus (ERF). ERF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.81. This compares to its industry's average Forward P/E of 11.50. Over the past year, ERF's Forward P/E has been as high as 13.21 and as low as 4.84, with a median of 7.26.
Finally, investors will want to recognize that ERF has a P/CF ratio of 2.64. 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. ERF's current P/CF looks attractive when compared to its industry's average P/CF of 2.75. ERF's P/CF has been as high as 9.36 and as low as 2.30, with a median of 3.94, all within the past year.
These are only a few of the key metrics included in Enerplus's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ERF looks like an impressive value stock at the moment.
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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.