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Should Value Investors Buy Eni (E) Stock?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Eni (E - Free Report) is a stock many investors are watching right now. E is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 5.04, which compares to its industry's average of 8.15. E's Forward P/E has been as high as 8.22 and as low as 3.12, with a median of 4.53, all within the past year.

Investors will also notice that E has a PEG ratio of 0.44. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. E's PEG compares to its industry's average PEG of 0.59. Over the past 52 weeks, E's PEG has been as high as 1.07 and as low as 0.30, with a median of 0.43.

Investors should also recognize that E has a P/B ratio of 0.97. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.44. Over the past 12 months, E's P/B has been as high as 1.11 and as low as 0.65, with a median of 0.90.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. E has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.56.

Finally, investors should note that E has a P/CF ratio of 2.13. 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. E's current P/CF looks attractive when compared to its industry's average P/CF of 4.87. E's P/CF has been as high as 3.79 and as low as 1.44, with a median of 2.03, all within the past year.

If you're looking for another solid Oil and Gas - Integrated - International value stock, take a look at Sasol (SSL - Free Report) . SSL is a # 1 (Strong Buy) stock with a Value score of A.

Shares of Sasol currently holds a Forward P/E ratio of 4.33, and its PEG ratio is 0.29. In comparison, its industry sports average P/E and PEG ratios of 8.15 and 0.59.

SSL's Forward P/E has been as high as 6.18 and as low as 3.98, with a median of 4.78. During the same time period, its PEG ratio has been as high as 0.43, as low as 0.24, with a median of 0.30.

Additionally, Sasol has a P/B ratio of 0.86 while its industry's price-to-book ratio sits at 1.44. For SSL, this valuation metric has been as high as 1.57, as low as 0.74, with a median of 1.06 over the past year.

These are only a few of the key metrics included in Eni and Sasol strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, E and SSL look like an impressive value stock at the moment.


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