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Are Investors Undervaluing Nabors Industries (NBR) Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Nabors Industries (NBR - Free Report) . NBR is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.96. This compares to its industry's average Forward P/E of 14.43. Over the past year, NBR's Forward P/E has been as high as 12,118.52 and as low as -1,466.05, with a median of -4.72.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NBR has a P/S ratio of 0.59. This compares to its industry's average P/S of 1.53.
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.
Precision Drilling also has a P/B ratio of 1.06 compared to its industry's price-to-book ratio of 1.09. Over the past year, its P/B ratio has been as high as 1.23, as low as 0.51, with a median of 0.93.
These are only a few of the key metrics included in Nabors Industries and Precision Drilling strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, NBR and PDS look like an impressive value stock at the moment.