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Are Investors Undervaluing NexTier Oilfield Solutions (NEX) 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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 stock to keep an eye on is NexTier Oilfield Solutions . NEX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another notable valuation metric for NEX is its P/B ratio of 2.92. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.29. Within the past 52 weeks, NEX's P/B has been as high as 5.33 and as low as 1.37, with a median of 3.35.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NEX has a P/S ratio of 0.75. This compares to its industry's average P/S of 0.82.

Finally, our model also underscores that NEX has a P/CF ratio of 5.44. 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 16.06. NEX's P/CF has been as high as 91.94 and as low as 4.44, with a median of 17.30, all within the past year.

Investors could also keep in mind ProPetro Holding (PUMP - Free Report) , an Oil and Gas - Field Services stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Furthermore, ProPetro Holding holds a P/B ratio of 1.22 and its industry's price-to-book ratio is 3.29. PUMP's P/B has been as high as 1.99, as low as 0.94, with a median of 1.35 over the past 12 months.

These are only a few of the key metrics included in NexTier Oilfield Solutions and ProPetro Holding strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, NEX and PUMP look like an impressive value stock at the moment.


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