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Is Callon Petroleum (CPE) Stock Undervalued Right Now?

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·3 min read
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Callon Petroleum (CPE). CPE is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 3.40. This compares to its industry's average Forward P/E of 5.91. CPE's Forward P/E has been as high as 7.67 and as low as 2.52, with a median of 4.13, all within the past year.

Another notable valuation metric for CPE is its P/B ratio of 1.78. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.17. Within the past 52 weeks, CPE's P/B has been as high as 3.88 and as low as 1.41, with a median of 2.29.

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. CPE has a P/S ratio of 1.54. This compares to its industry's average P/S of 2.6.

Finally, investors should note that CPE has a P/CF ratio of 4.40. 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. CPE's P/CF compares to its industry's average P/CF of 9.96. CPE's P/CF has been as high as 5.18 and as low as -40.27, with a median of -1.33, all within the past year.

SilverBow Resources (SBOW) may be another strong Oil and Gas - Exploration and Production - United States stock to add to your shortlist. SBOW is a # 1 (Strong Buy) stock with a Value grade of A.

Furthermore, SilverBow Resources holds a P/B ratio of 2.15 and its industry's price-to-book ratio is 3.17. SBOW's P/B has been as high as 5.26, as low as 0.98, with a median of 2.21 over the past 12 months.

Value investors will likely look at more than just these metrics, but the above data helps show that Callon Petroleum and SilverBow Resources are likely undervalued currently. And when considering the strength of its earnings outlook, CPE and SBOW sticks out as one of the market's strongest value stocks.

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Callon Petroleum Company (CPE) : Free Stock Analysis Report
SilverBow Resources (SBOW) : Free Stock Analysis Report
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