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Is Shell Oil (RDS.A) Stock Undervalued Right Now?

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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, 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One company to watch right now is Shell Oil . RDS.A is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.85. This compares to its industry's average Forward P/E of 12.63. Over the last 12 months, RDS.A's Forward P/E has been as high as 18.75 and as low as 10.81, with a median of 14.18.

RDS.A is also sporting a PEG ratio of 0.77. 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. RDS.A's industry currently sports an average PEG of 1.17. Over the last 12 months, RDS.A's PEG has been as high as 3.47 and as low as 0.77, with a median of 2.04.

Finally, our model also underscores that RDS.A has a P/CF ratio of 6.70. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.24. Within the past 12 months, RDS.A's P/CF has been as high as 7.90 and as low as 6.48, with a median of 6.96.

Value investors will likely look at more than just these metrics, but the above data helps show that Shell Oil is likely undervalued currently. And when considering the strength of its earnings outlook, RDS.A sticks out at as one of the market's strongest value stocks.