Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put CVR Refining, LP stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, CVR Refining has a trailing twelve months PE ratio of 9.27, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.19. If we focus on the stock’s long-term PE trend, the current level puts CVR Refining’s current PE ratio above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also compares favorably with the Zacks classified Oil and Gas - Refining and Marketing - Master Limited Partnerships sector’s trailing twelve months PE ratio, which stands at 50.42. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that CVR Refining has a forward PE ratio (price relative to this year’s earnings) of just 13.31, which is significantly higher than the current level. So it is fair to expect an increase in the company’s share price in the near term.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, CVR Refining has a P/S ratio of about 0.28. This is a bit lower than the S&P 500 average, which comes in at 3.13 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, CVR Refining currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes CVR Refining a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the P/CF ratio (another great indicator of value) comes in at 4.03, which is far lower than the industry average of 8.55. Clearly, CVRR is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though CVR Refining might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘F’. This gives CVRR a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been unfavorable. Both the current quarter and full year has seen one estimate going south over the last two months, compared to no movements in the opposite direction.
This has had a substantial impact on the consensus estimate as the current quarter consensus estimate has decreased by 66.7% in the past two months, while the full year estimate has dropped by 25.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Bottom Line
CVR Refining is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (among Bottom 18% of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
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Is CVR Refining a Great Stock for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put CVR Refining, LP stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, CVR Refining has a trailing twelve months PE ratio of 9.27, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.19. If we focus on the stock’s long-term PE trend, the current level puts CVR Refining’s current PE ratio above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also compares favorably with the Zacks classified Oil and Gas - Refining and Marketing - Master Limited Partnerships sector’s trailing twelve months PE ratio, which stands at 50.42. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that CVR Refining has a forward PE ratio (price relative to this year’s earnings) of just 13.31, which is significantly higher than the current level. So it is fair to expect an increase in the company’s share price in the near term.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, CVR Refining has a P/S ratio of about 0.28. This is a bit lower than the S&P 500 average, which comes in at 3.13 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, CVR Refining currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes CVR Refining a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the P/CF ratio (another great indicator of value) comes in at 4.03, which is far lower than the industry average of 8.55. Clearly, CVRR is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though CVR Refining might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘F’. This gives CVRR a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been unfavorable. Both the current quarter and full year has seen one estimate going south over the last two months, compared to no movements in the opposite direction.
This has had a substantial impact on the consensus estimate as the current quarter consensus estimate has decreased by 66.7% in the past two months, while the full year estimate has dropped by 25.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
CVR Refining, LP Price and Consensus
CVR Refining, LP Price and Consensus | CVR Refining, LP Quote
Bottom Line
CVR Refining is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (among Bottom 18% of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>