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Are Investors Undervaluing Crescent Point Energy (CPG) Right Now?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Crescent Point Energy (CPG - Free Report) . CPG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 3.80 right now. For comparison, its industry sports an average P/E of 5.65. Over the past year, CPG's Forward P/E has been as high as 5.85 and as low as 1.67, with a median of 4.07.
Another notable valuation metric for CPG is its P/B ratio of 0.78. The P/B is a method of comparing a stock's market value to 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 1.57. Within the past 52 weeks, CPG's P/B has been as high as 1.20 and as low as 0.51, with a median of 0.79.
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. CPG has a P/S ratio of 1.22. This compares to its industry's average P/S of 1.29.
Finally, we should also recognize that CPG has a P/CF ratio of 2.08. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. CPG's P/CF compares to its industry's average P/CF of 3.74. Over the past 52 weeks, CPG's P/CF has been as high as 2.33 and as low as 0.94, with a median of 1.40.
These are only a few of the key metrics included in Crescent Point Energy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CPG looks like an impressive value stock at the moment.