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Are Investors Undervaluing Bonanza Creek Energy (BCEI) 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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 stock to keep an eye on is Bonanza Creek Energy (BCEI - Free Report) . BCEI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.42. This compares to its industry's average Forward P/E of 18.86. BCEI's Forward P/E has been as high as 7.42 and as low as 1.93, with a median of 3.36, all within the past year.

Finally, we should also recognize that BCEI has a P/CF ratio of 1.51. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.44. BCEI's P/CF has been as high as 3.65 and as low as 0.99, with a median of 1.87, all within the past year.

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

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