Are Investors Undervaluing BP (BP) Right Now?

BP YPF

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

BP (BP - Free Report) is a stock many investors are watching right now. BP 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 4.99 right now. For comparison, its industry sports an average P/E of 6.99. Over the past year, BP's Forward P/E has been as high as 7.57 and as low as 3.94, with a median of 5.07.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BP has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.53.

If you're looking for another solid Oil and Gas - Integrated - International value stock, take a look at YPF Sociedad Anonima (YPF - Free Report) . YPF is a # 2 (Buy) stock with a Value score of A.

YPF Sociedad Anonima sports a P/B ratio of 0.29 as well; this compares to its industry's price-to-book ratio of 1.34. In the past 52 weeks, YPF's P/B has been as high as 0.33, as low as 0.11, with a median of 0.20.

These are only a few of the key metrics included in BP and YPF Sociedad Anonima strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BP and YPF look like an impressive value stock at the moment.

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