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Should Value Investors Buy These Oils-Energy Stocks?

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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.

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

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Sasol (SSL - Free Report) is a stock many investors are watching right now. SSL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 5.68, while its industry has an average P/E of 8.84. Over the past 52 weeks, SSL's Forward P/E has been as high as 12.41 and as low as 3.62, with a median of 4.79.

We also note that SSL holds a PEG ratio of 0.35. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SSL's PEG compares to its industry's average PEG of 0.79. Over the last 12 months, SSL's PEG has been as high as 0.96 and as low as 0.13, with a median of 0.30.

We should also highlight that SSL has a P/B ratio of 1.41. Investors use the P/B ratio to look at a stock's market value versus 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 1.51. Within the past 52 weeks, SSL's P/B has been as high as 1.44 and as low as 0.82, with a median of 1.04.

Another great Oil and Gas - Integrated - International stock you could consider is Vista Oil & Gas (VIST - Free Report) , which is a # 1 (Strong Buy) stock with a Value Score of A.

Furthermore, Vista Oil & Gas holds a P/B ratio of 1.38 and its industry's price-to-book ratio is 1.51. VIST's P/B has been as high as 1.42, as low as 0.43, with a median of 0.81 over the past 12 months.

These are only a few of the key metrics included in Sasol and Vista Oil & Gas strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, SSL and VIST look like an impressive value stock at the moment.


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Sasol Ltd. (SSL) - free report >>

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