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Should Value Investors Buy Gran Tierra Energy (GTE) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 company to watch right now is Gran Tierra Energy (GTE). GTE is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another notable valuation metric for GTE is its P/B ratio of 0.49. 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. GTE's current P/B looks attractive when compared to its industry's average P/B of 0.74. GTE's P/B has been as high as 1.53 and as low as 0.49, with a median of 0.89, over the past year.

Finally, investors should note that GTE has a P/CF ratio of 1.66. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 2.56. Over the past year, GTE's P/CF has been as high as 9.14 and as low as 1.66, with a median of 3.06.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Gran Tierra Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GTE 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.

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