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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is Shell Oil . RDS.A is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 28.21, while its industry has an average P/E of 70.10. Over the past year, RDS.A's Forward P/E has been as high as 416.88 and as low as 5.81, with a median of 11.57.
Another notable valuation metric for RDS.A is its P/B ratio of 0.69. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. RDS.A's current P/B looks attractive when compared to its industry's average P/B of 0.74. RDS.A's P/B has been as high as 1.31 and as low as 0.46, with a median of 1.14, over the past year.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. RDS.A has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.42.
Finally, investors will want to recognize that RDS.A has a P/CF ratio of 3.19. 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. RDS.A's P/CF compares to its industry's average P/CF of 4.55. Over the past 52 weeks, RDS.A's P/CF has been as high as 5.84 and as low as 1.93, with a median of 4.97.
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.
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Are Investors Undervaluing Shell Oil (RDS.A) Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is Shell Oil . RDS.A is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 28.21, while its industry has an average P/E of 70.10. Over the past year, RDS.A's Forward P/E has been as high as 416.88 and as low as 5.81, with a median of 11.57.
Another notable valuation metric for RDS.A is its P/B ratio of 0.69. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. RDS.A's current P/B looks attractive when compared to its industry's average P/B of 0.74. RDS.A's P/B has been as high as 1.31 and as low as 0.46, with a median of 1.14, over the past year.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. RDS.A has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.42.
Finally, investors will want to recognize that RDS.A has a P/CF ratio of 3.19. 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. RDS.A's P/CF compares to its industry's average P/CF of 4.55. Over the past 52 weeks, RDS.A's P/CF has been as high as 5.84 and as low as 1.93, with a median of 4.97.
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.