Back to top

Image: Bigstock

Are Investors Undervaluing Continental Resources (CLR) Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 stock to keep an eye on is Continental Resources (CLR - Free Report) . CLR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

CLR is also sporting a PEG ratio of 0.16. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CLR's industry has an average PEG of 0.17 right now. CLR's PEG has been as high as 7.21 and as low as 0.13, with a median of 0.27, all within the past year.

Another notable valuation metric for CLR is its P/B ratio of 2.95. 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 3.39. CLR's P/B has been as high as 3.26 and as low as 1.69, with a median of 2.43, over the past year.

Finally, our model also underscores that CLR has a P/CF ratio of 6.34. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.16. Over the past 52 weeks, CLR's P/CF has been as high as 8.39 and as low as 4.58, with a median of 5.81.

If you're looking for another solid Oil and Gas - Exploration and Production - United States value stock, take a look at Geopark (GPRK - Free Report) . GPRK is a # 2 (Buy) stock with a Value score of A.

Geopark sports a P/B ratio of -21.98 as well; this compares to its industry's price-to-book ratio of 3.39. In the past 52 weeks, GPRK's P/B has been as high as -5.22, as low as -29.55, with a median of -10.55.

Value investors will likely look at more than just these metrics, but the above data helps show that Continental Resources and Geopark are likely undervalued currently. And when considering the strength of its earnings outlook, CLR and GPRK sticks out as one of the market's strongest value stocks.


In-Depth Zacks Research for the Tickers Above


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


Continental Resources, Inc. (CLR) - free report >>

Geopark Ltd (GPRK) - free report >>

Published in