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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 WPX Energy (WPX). WPX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 13.96, which compares to its industry's average of 19.45. WPX's Forward P/E has been as high as 42.31 and as low as 13.96, with a median of 18.31, all within the past year.
Another notable valuation metric for WPX is its P/B ratio of 1.04. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. WPX's current P/B looks attractive when compared to its industry's average P/B of 1.89. Over the past 12 months, WPX's P/B has been as high as 1.51 and as low as 0.83, with a median of 1.08.
Finally, we should also recognize that WPX has a P/CF ratio of 2.81. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.44. Over the past year, WPX's P/CF has been as high as 5.93 and as low as 2.32, with a median of 3.12.
These figures are just a handful of the metrics value investors tend to look at, but they help show that WPX Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, WPX feels like a great value stock at the moment.