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Are Investors Undervaluing Southwestern Energy (SWN) Right Now?

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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, 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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Southwestern Energy (SWN - Free Report) . SWN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.33 right now. For comparison, its industry sports an average P/E of 15.08. SWN's Forward P/E has been as high as 13.36 and as low as 4.19, with a median of 6.47, all within the past year.

Another valuation metric that we should highlight is SWN's P/B ratio of 1.47. The P/B ratio pits a stock's market value against 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 2.17. Over the past 12 months, SWN's P/B has been as high as 2.06 and as low as 1.04, with a median of 1.43.

Finally, investors should note that SWN has a P/CF ratio of 2.59. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.86. SWN's P/CF has been as high as 21.50 and as low as 1.14, with a median of 2.33, all within the past year.

These are only a few of the key metrics included in Southwestern Energy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SWN looks like an impressive value stock at the moment.


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