Back to top

Image: Bigstock

Is Nabors Industries (NBR) Stock Undervalued Right Now?

Read MoreHide Full Article

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 stock to keep an eye on is Nabors Industries (NBR - Free Report) . NBR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

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. NBR has a P/S ratio of 0.67. This compares to its industry's average P/S of 1.43.

Finally, investors should note that NBR has a P/CF ratio of 6.79. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 25.18. Over the past 52 weeks, NBR's P/CF has been as high as 19.62 and as low as 2.58, with a median of 6.15.

Investors could also keep in mind Precision Drilling (PDS - Free Report) , an Oil and Gas - Drilling stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Furthermore, Precision Drilling holds a P/B ratio of 0.97 and its industry's price-to-book ratio is 0.99. PDS's P/B has been as high as 1.23, as low as 0.38, with a median of 0.74 over the past 12 months.

Value investors will likely look at more than just these metrics, but the above data helps show that Nabors Industries and Precision Drilling are likely undervalued currently. And when considering the strength of its earnings outlook, NBR and PDS 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:

Nabors Industries Ltd. (NBR) - free report >>

Precision Drilling Corporation (PDS) - free report >>

Published in