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Are Investors Undervaluing These Oils-Energy Stocks Right Now?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

One company value investors might notice is Plains Group (PAGP - Free Report) . PAGP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.66. This compares to its industry's average Forward P/E of 16.11. PAGP's Forward P/E has been as high as 29.02 and as low as 2.71, with a median of 11.26, all within the past year.

Finally, our model also underscores that PAGP has a P/CF ratio of 2.67. 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. PAGP's current P/CF looks attractive when compared to its industry's average P/CF of 10.32. Over the past 52 weeks, PAGP's P/CF has been as high as 3.50 and as low as 0.66, with a median of 2.84.

If you're looking for another solid Oil and Gas - Production and Pipelines value stock, take a look at Ultrapar Participacoes (UGP - Free Report) . UGP is a # 2 (Buy) stock with a Value score of A.

Shares of Ultrapar Participacoes are currently trading at a forward earnings multiple of 17 and a PEG ratio of 0.76 compared to its industry's P/E and PEG ratios of 16.11 and 2.17, respectively.

UGP's price-to-earnings ratio has been as high as 18.06 and as low as 8.54, with a median of 13.09, while its PEG ratio has been as high as 0.81 and as low as 0.36, with a median of 0.51, all within the past year.

Ultrapar Participacoes sports a P/B ratio of 2.11 as well; this compares to its industry's price-to-book ratio of 1.91. In the past 52 weeks, UGP's P/B has been as high as 2.73, as low as 1.53, with a median of 2.

Value investors will likely look at more than just these metrics, but the above data helps show that Plains Group and Ultrapar Participacoes are likely undervalued currently. And when considering the strength of its earnings outlook, PAGP and UGP sticks out as one of the market's strongest value stocks.


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Ultrapar Participacoes S.A. (UGP) - free report >>

Plains Group Holdings, L.P. (PAGP) - free report >>

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