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Should Value Investors Buy Diamondback Energy (FANG) Stock?
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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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Diamondback Energy (FANG - Free Report) . FANG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 4.59, which compares to its industry's average of 5.01. Over the last 12 months, FANG's Forward P/E has been as high as 10.90 and as low as 4.37, with a median of 6.50.
Another notable valuation metric for FANG is its P/B ratio of 1.49. 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. FANG's current P/B looks attractive when compared to its industry's average P/B of 3.14. Over the past year, FANG's P/B has been as high as 2.06 and as low as 1.03, with a median of 1.62.
Finally, investors will want to recognize that FANG has a P/CF ratio of 5.12. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. FANG's P/CF compares to its industry's average P/CF of 10.39. Over the past 52 weeks, FANG's P/CF has been as high as 12.67 and as low as -114.24, with a median of 6.51.
Murphy Oil (MUR - Free Report) may be another strong Oil and Gas - Exploration and Production - United States stock to add to your shortlist. MUR is a # 2 (Buy) stock with a Value grade of A.
Murphy Oil sports a P/B ratio of 1.07 as well; this compares to its industry's price-to-book ratio of 3.14. In the past 52 weeks, MUR's P/B has been as high as 1.67, as low as 0.73, with a median of 1.09.
Value investors will likely look at more than just these metrics, but the above data helps show that Diamondback Energy and Murphy Oil are likely undervalued currently. And when considering the strength of its earnings outlook, FANG and MUR sticks out as one of the market's strongest value stocks.
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Should Value Investors Buy Diamondback Energy (FANG) Stock?
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Diamondback Energy (FANG - Free Report) . FANG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 4.59, which compares to its industry's average of 5.01. Over the last 12 months, FANG's Forward P/E has been as high as 10.90 and as low as 4.37, with a median of 6.50.
Another notable valuation metric for FANG is its P/B ratio of 1.49. 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. FANG's current P/B looks attractive when compared to its industry's average P/B of 3.14. Over the past year, FANG's P/B has been as high as 2.06 and as low as 1.03, with a median of 1.62.
Finally, investors will want to recognize that FANG has a P/CF ratio of 5.12. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. FANG's P/CF compares to its industry's average P/CF of 10.39. Over the past 52 weeks, FANG's P/CF has been as high as 12.67 and as low as -114.24, with a median of 6.51.
Murphy Oil (MUR - Free Report) may be another strong Oil and Gas - Exploration and Production - United States stock to add to your shortlist. MUR is a # 2 (Buy) stock with a Value grade of A.
Murphy Oil sports a P/B ratio of 1.07 as well; this compares to its industry's price-to-book ratio of 3.14. In the past 52 weeks, MUR's P/B has been as high as 1.67, as low as 0.73, with a median of 1.09.
Value investors will likely look at more than just these metrics, but the above data helps show that Diamondback Energy and Murphy Oil are likely undervalued currently. And when considering the strength of its earnings outlook, FANG and MUR sticks out as one of the market's strongest value stocks.