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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One company value investors might notice is Vaalco Energy (EGY). EGY is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 21.53. This compares to its industry's average Forward P/E of 27.83. Over the last 12 months, EGY's Forward P/E has been as high as 38.30 and as low as 8.93, with a median of 19.10.
Investors should also recognize that EGY has a P/B ratio of 0.84. 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. This stock's P/B looks attractive against its industry's average P/B of 0.95. Over the past year, EGY's P/B has been as high as 1.32 and as low as 0.65, with a median of 0.82.
Finally, investors will want to recognize that EGY has a P/CF ratio of 2.37. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 3.06. Over the past 52 weeks, EGY's P/CF has been as high as 3.16 and as low as 1.56, with a median of 2.17.
These are just a handful of the figures considered in Vaalco Energy'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 EGY is an impressive value stock right now.
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Vaalco Energy Inc (EGY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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