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.
One company value investors might notice is Eclipse Resources . ECR is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ECR has a P/S ratio of 0.53. This compares to its industry's average P/S of 1.34.
Finally, our model also underscores that ECR has a P/CF ratio of 2.24. 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. ECR's current P/CF looks attractive when compared to its industry's average P/CF of 3.76. Within the past 12 months, ECR's P/CF has been as high as 8.39 and as low as 2.24, with a median of 4.14.
These are just a handful of the figures considered in Eclipse Resources'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 ECR is an impressive value stock right now.