Back to top

Image: Bigstock

Is Oasis Petroleum (OAS) Stock Undervalued Right Now?

Read MoreHide Full Article

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One company value investors might notice is Oasis Petroleum (OAS - Free Report) . OAS is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 3.81, while its industry has an average P/E of 6.31. Over the past 52 weeks, OAS's Forward P/E has been as high as 9.37 and as low as 3.48, with a median of 5.81.

Investors should also recognize that OAS has a P/B ratio of 1.88. 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 3.64. Within the past 52 weeks, OAS's P/B has been as high as 2.50 and as low as 1.49, with a median of 2.02.

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. OAS has a P/S ratio of 1.42. This compares to its industry's average P/S of 2.38.

If you're looking for another solid Oil and Gas - Exploration and Production - United States value stock, take a look at SilverBow Resources (SBOW - Free Report) . SBOW is a # 1 (Strong Buy) stock with a Value score of A.

SilverBow Resources sports a P/B ratio of 1.92 as well; this compares to its industry's price-to-book ratio of 3.64. In the past 52 weeks, SBOW's P/B has been as high as 5.26, as low as 1.13, with a median of 2.21.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Oasis Petroleum and SilverBow Resources are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OAS and SBOW feels like a great value stock at the moment.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Oasis Petroleum Inc. (OAS) - free report >>

SilverBow Resources (SBOW) - free report >>

Published in