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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Shell Oil . RDS.A is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.57 right now. For comparison, its industry sports an average P/E of 16.05. RDS.A's Forward P/E has been as high as 13.43 and as low as 10.22, with a median of 11.48, all within the past year.
Investors should also note that RDS.A holds a PEG ratio of 2.11. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RDS.A's industry has an average PEG of 2.31 right now. Over the last 12 months, RDS.A's PEG has been as high as 2.69 and as low as 1.22, with a median of 1.74.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RDS.A has a P/S ratio of 0.61. This compares to its industry's average P/S of 0.63.
Finally, we should also recognize that RDS.A has a P/CF ratio of 4.99. 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. RDS.A's P/CF compares to its industry's average P/CF of 5.51. Over the past 52 weeks, RDS.A's P/CF has been as high as 5.99 and as low as 4.91, with a median of 5.41.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Shell Oil is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RDS.A feels like a great value stock at the moment.
Image: Bigstock
Is Shell Oil (RDS.A) a Great Value Stock Right Now?
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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Shell Oil . RDS.A is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.57 right now. For comparison, its industry sports an average P/E of 16.05. RDS.A's Forward P/E has been as high as 13.43 and as low as 10.22, with a median of 11.48, all within the past year.
Investors should also note that RDS.A holds a PEG ratio of 2.11. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RDS.A's industry has an average PEG of 2.31 right now. Over the last 12 months, RDS.A's PEG has been as high as 2.69 and as low as 1.22, with a median of 1.74.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RDS.A has a P/S ratio of 0.61. This compares to its industry's average P/S of 0.63.
Finally, we should also recognize that RDS.A has a P/CF ratio of 4.99. 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. RDS.A's P/CF compares to its industry's average P/CF of 5.51. Over the past 52 weeks, RDS.A's P/CF has been as high as 5.99 and as low as 4.91, with a median of 5.41.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Shell Oil is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RDS.A feels like a great value stock at the moment.