Should Value Investors Buy Vermilion Energy (VET) Stock?

VET

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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Vermilion Energy (VET - Free Report) . VET is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VET has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.39.

Finally, investors should note that VET has a P/CF ratio of 1. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. VET's P/CF compares to its industry's average P/CF of 3.60. Over the past 52 weeks, VET's P/CF has been as high as 5.82 and as low as 1, with a median of 3.89.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Vermilion Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, VET feels like a great value stock at the moment.

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