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Is Chaparral Energy, Inc. (CHAP) Stock Undervalued Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

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 to watch right now is Chaparral Energy, Inc. (CHAP - Free Report) . CHAP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.58, while its industry has an average P/E of 16.40. CHAP's Forward P/E has been as high as 72.96 and as low as 4.67, with a median of 29.23, 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. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CHAP has a P/S ratio of 0.97. This compares to its industry's average P/S of 1.48.

Finally, we should also recognize that CHAP has a P/CF ratio of 1.97. 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. CHAP's P/CF compares to its industry's average P/CF of 5.01. Over the past year, CHAP's P/CF has been as high as 3.06 and as low as -2,585.67, with a median of -13.53.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Chaparral Energy, Inc. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CHAP feels like a great value stock at the moment.




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