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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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.
HighPeak Energy (HPK) is a stock many investors are watching right now. HPK is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HPK has a P/S ratio of 1.1. This compares to its industry's average P/S of 2.01.
Finally, investors should note that HPK has a P/CF ratio of 1.79. 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. HPK's P/CF compares to its industry's average P/CF of 4.49. Over the past 52 weeks, HPK's P/CF has been as high as 3.22 and as low as 1.62, with a median of 2.53.
These figures are just a handful of the metrics value investors tend to look at, but they help show that HighPeak Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HPK feels like a great value stock at the moment.
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HighPeak Energy, Inc. (HPK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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