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Is Enerplus (ERF) Stock Undervalued Right Now?

Zacks Equity Research

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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Enerplus (ERF). ERF is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 6.40, which compares to its industry's average of 9.79. ERF's Forward P/E has been as high as 13.21 and as low as 4.84, with a median of 8.43, all within the past year.

Finally, we should also recognize that ERF has a P/CF ratio of 3.02. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 3.26. Over the past 52 weeks, ERF's P/CF has been as high as 12.66 and as low as 3.02, with a median of 6.71.

Value investors will likely look at more than just these metrics, but the above data helps show that Enerplus is likely undervalued currently. And when considering the strength of its earnings outlook, ERF sticks out at as one of the market's strongest value stocks.

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