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Should Value Investors Buy NRG Energy (NRG) Stock?
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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is NRG Energy (NRG - Free Report) . NRG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.77 right now. For comparison, its industry sports an average P/E of 14.21. Over the last 12 months, NRG's Forward P/E has been as high as 13.18 and as low as 7.31, with a median of 8.35.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NRG has a P/S ratio of 1.06. This compares to its industry's average P/S of 2.32.
Value investors will likely look at more than just these metrics, but the above data helps show that NRG Energy is likely undervalued currently. And when considering the strength of its earnings outlook, NRG sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy NRG Energy (NRG) Stock?
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is NRG Energy (NRG - Free Report) . NRG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.77 right now. For comparison, its industry sports an average P/E of 14.21. Over the last 12 months, NRG's Forward P/E has been as high as 13.18 and as low as 7.31, with a median of 8.35.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NRG has a P/S ratio of 1.06. This compares to its industry's average P/S of 2.32.
Value investors will likely look at more than just these metrics, but the above data helps show that NRG Energy is likely undervalued currently. And when considering the strength of its earnings outlook, NRG sticks out at as one of the market's strongest value stocks.