The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Eni (E) is a stock many investors are watching right now. E is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.33, which compares to its industry's average of 16.72. Over the past 52 weeks, E's Forward P/E has been as high as 10.97 and as low as 6.79, with a median of 8.05.
Another notable valuation metric for E is its P/B ratio of 0.97. 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. E's current P/B looks attractive when compared to its industry's average P/B of 1.78. Over the past 12 months, E's P/B has been as high as 1.00 and as low as 0.70, with a median of 0.85.
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. E has a P/S ratio of 0.86. This compares to its industry's average P/S of 0.92.
Finally, we should also recognize that E has a P/CF ratio of 4.96. 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 8.46. Over the past year, E's P/CF has been as high as 5.13 and as low as 3.64, with a median of 4.30.
Value investors will likely look at more than just these metrics, but the above data helps show that Eni is likely undervalued currently. And when considering the strength of its earnings outlook, E sticks out as one of the market's strongest value stocks.
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Eni SpA (E): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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