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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 to watch right now is RPC (RES). RES is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.97. This compares to its industry's average Forward P/E of 11.94. Over the last 12 months, RES's Forward P/E has been as high as 20.62 and as low as 6.43, with a median of 10.97.
We should also highlight that RES has a P/B ratio of 1.01. 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. This stock's P/B looks attractive against its industry's average P/B of 1.78. Over the past 12 months, RES's P/B has been as high as 1.52 and as low as 0.88, with a median of 1.24.
Finally, investors will want to recognize that RES has a P/CF ratio of 4.99. 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. RES's P/CF compares to its industry's average P/CF of 6.37. Over the past 52 weeks, RES's P/CF has been as high as 6.73 and as low as 4.33, with a median of 5.48.
Value investors will likely look at more than just these metrics, but the above data helps show that RPC is likely undervalued currently. And when considering the strength of its earnings outlook, RES sticks out at as one of the market's strongest value stocks.
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RPC, Inc. (RES): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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