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Are Investors Undervaluing Penn Virginia (PVAC) Right Now?

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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Penn Virginia (PVAC - Free Report) . PVAC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 4.74. This compares to its industry's average Forward P/E of 11.40. PVAC's Forward P/E has been as high as 15.41 and as low as 1.06, with a median of 5.97, all within the past year.

Another valuation metric that we should highlight is PVAC's P/B ratio of 1. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.19. Over the past year, PVAC's P/B has been as high as 1.33 and as low as 0.09, with a median of 0.39.

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. PVAC has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.79.

These are just a handful of the figures considered in Penn Virginia'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 PVAC is an impressive value stock right now.


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