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Is Southwestern Energy (SWN) Stock Undervalued Right Now?

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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, 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.

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.

Southwestern Energy (SWN - Free Report) is a stock many investors are watching right now. SWN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 6.69, while its industry has an average P/E of 13.86. SWN's Forward P/E has been as high as 13.36 and as low as 4.19, with a median of 6.31, all within the past year.

Another valuation metric that we should highlight is SWN's P/B ratio of 1.45. 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 attractive against its industry's average P/B of 2.20. Within the past 52 weeks, SWN's P/B has been as high as 2.06 and as low as 1.04, with a median of 1.38.

Finally, we should also recognize that SWN has a P/CF ratio of 2.61. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 6.99. SWN's P/CF has been as high as 3.48 and as low as 1.14, with a median of 2.30, all within the past year.

These are just a handful of the figures considered in Southwestern Energy's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that SWN is an impressive value stock right now.


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