Back to top

Image: Bigstock

Should Value Investors Buy Repsol (REPYY) Stock?

Read MoreHide Full Article

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Repsol (REPYY - Free Report) is a stock many investors are watching right now. REPYY is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 5.56, while its industry has an average P/E of 10.22. REPYY's Forward P/E has been as high as 6.17 and as low as 4.00, with a median of 5.01, all within the past year.

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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. REPYY has a P/S ratio of 0.76. This compares to its industry's average P/S of 1.01.

Finally, our model also underscores that REPYY has a P/CF ratio of 5.47. 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. This stock's P/CF looks attractive against its industry's average P/CF of 7.23. Over the past year, REPYY's P/CF has been as high as 5.69 and as low as 2.06, with a median of 3.09.

These are only a few of the key metrics included in Repsol'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, REPYY looks like an impressive value stock at the moment.

Published in