Are Investors Undervaluing CVR Energy (CVI) Right Now?

VLO CVI

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

CVR Energy (CVI - Free Report) is a stock many investors are watching right now. CVI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CVI has a P/S ratio of 0.31. This compares to its industry's average P/S of 0.34.

Finally, we should also recognize that CVI has a P/CF ratio of 3.97. 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. CVI's P/CF compares to its industry's average P/CF of 4.84. Within the past 12 months, CVI's P/CF has been as high as 6.56 and as low as 2.74, with a median of 4.27.

Investors could also keep in mind Valero Energy (VLO - Free Report) , an Oil and Gas - Refining and Marketing stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Shares of Valero Energy currently holds a Forward P/E ratio of 7.27, and its PEG ratio is 1.21. In comparison, its industry sports average P/E and PEG ratios of 7.40 and 0.85.

VLO's Forward P/E has been as high as 8.76 and as low as 4.41, with a median of 6.25. During the same time period, its PEG ratio has been as high as 1.46, as low as 0.73, with a median of 1.04.

Furthermore, Valero Energy holds a P/B ratio of 1.69 and its industry's price-to-book ratio is 1.99. VLO's P/B has been as high as 2.31, as low as 1.39, with a median of 1.84 over the past 12 months.

These are just a handful of the figures considered in CVR Energy and Valero Energy's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CVI and VLO is an impressive value stock right now.

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