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Are Investors Undervaluing Continental Resources (CLR) Right Now?

Zacks Equity Research

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Continental Resources (CLR). CLR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.43, which compares to its industry's average of 12.59. Over the last 12 months, CLR's Forward P/E has been as high as 21.85 and as low as 10.62, with a median of 17.83.

Investors should also note that CLR holds a PEG ratio of 0.70. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CLR's industry has an average PEG of 0.76 right now. Within the past year, CLR's PEG has been as high as 1.59 and as low as 0.50, with a median of 1.20.

Finally, investors should note that CLR has a P/CF ratio of 4.61. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.04. Within the past 12 months, CLR's P/CF has been as high as 9.22 and as low as 3.90, with a median of 6.17.

These are just a handful of the figures considered in Continental Resources's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CLR is an impressive value stock right now.

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