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Is Eclipse Resources (MR) Stock Undervalued Right Now?

Zacks Equity Research
Virtu Financial (VIRT) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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, 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.

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 value investors might notice is Eclipse Resources (MR). MR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. MR has a P/S ratio of 0.68. This compares to its industry's average P/S of 1.21.

Finally, investors should note that MR has a P/CF ratio of 1.82. 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. MR's current P/CF looks attractive when compared to its industry's average P/CF of 5.71. Over the past 52 weeks, MR's P/CF has been as high as 6.84 and as low as 1.71, with a median of 3.35.

These are only a few of the key metrics included in Eclipse Resources's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MR looks like an impressive value stock at the moment.


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