Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is National Energy Services Reunited (NESR). NESR is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.16, which compares to its industry's average of 13.43. Over the past 52 weeks, NESR's Forward P/E has been as high as 8.69 and as low as 4.36, with a median of 6.10.
Another valuation metric that we should highlight is NESR's P/B ratio of 0.89. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. NESR's current P/B looks attractive when compared to its industry's average P/B of 0.96. Over the past 12 months, NESR's P/B has been as high as 1.09 and as low as 0.57, with a median of 0.90.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NESR has a P/S ratio of 0.64. This compares to its industry's average P/S of 0.7.
Finally, investors will want to recognize that NESR has a P/CF ratio of 3.84. 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 6.93. NESR's P/CF has been as high as 4.19 and as low as 2.39, with a median of 2.97, all within the past year.
These are just a handful of the figures considered in National Energy Services Reunited'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 NESR is an impressive value stock right now.
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National Energy Services Reunited (NESR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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