Should Value Investors Buy Crescent Point Energy (CPG) Stock?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Crescent Point Energy (CPG). CPG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 10.05, while its industry has an average P/E of 10.41. Over the last 12 months, CPG's Forward P/E has been as high as 25.41 and as low as -16.13, with a median of 14.58.
We should also highlight that CPG has a P/B ratio of 0.39. The P/B ratio is used to compare a stock's market value with 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 0.89. Over the past 12 months, CPG's P/B has been as high as 0.64 and as low as 0.22, with a median of 0.42.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CPG has a P/S ratio of 0.68. This compares to its industry's average P/S of 1.
Finally, investors will want to recognize that CPG has a P/CF ratio of 0.90. 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. CPG's current P/CF looks attractive when compared to its industry's average P/CF of 3.32. CPG's P/CF has been as high as 4.65 and as low as 0.64, with a median of 2.20, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Crescent Point Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CPG feels like a great 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.