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Are Investors Undervaluing Murphy Oil (MUR) Right Now?
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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Murphy Oil (MUR - Free Report) is a stock many investors are watching right now. MUR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 4.40. This compares to its industry's average Forward P/E of 5.44. Over the last 12 months, MUR's Forward P/E has been as high as 21.68 and as low as 3.72, with a median of 9.40.
Another valuation metric that we should highlight is MUR's P/B ratio of 1.35. 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. This company's current P/B looks solid when compared to its industry's average P/B of 3.33. MUR's P/B has been as high as 1.67 and as low as 0.76, with a median of 1.17, over the past year.
Finally, our model also underscores that MUR has a P/CF ratio of 4.86. 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. This stock's P/CF looks attractive against its industry's average P/CF of 7.88. MUR's P/CF has been as high as 29.64 and as low as 3.37, with a median of 7.11, all within the past year.
Another great Oil and Gas - Exploration and Production - United States stock you could consider is Permian Resources Corporation (PR - Free Report) , which is a # 1 (Strong Buy) stock with a Value Score of A.
Permian Resources Corporation sports a P/B ratio of 0.72 as well; this compares to its industry's price-to-book ratio of 3.33. In the past 52 weeks, PR's P/B has been as high as 0.98, as low as 0.51, with a median of 0.77.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Murphy Oil and Permian Resources Corporation are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MUR and PR feels like a great value stock at the moment.