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Are Investors Undervaluing Crescent Point Energy (CPG) Right Now?

Zacks Equity Research
PNFP vs. CHCO: Which Stock Is the Better Value Option?

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 stock to keep an eye on is Crescent Point Energy (CPG). CPG is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

Another valuation metric that we should highlight is CPG's P/B ratio of 0.40. The P/B is a method of comparing a stock's market value to 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 1.02. Over the past 12 months, CPG's P/B has been as high as 0.66 and as low as 0.22, with a median of 0.43.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CPG has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.08.

Finally, investors will want to recognize that CPG has a P/CF ratio of 0.99. 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 3.14. Within the past 12 months, CPG's P/CF has been as high as 4.60 and as low as 0.65, with a median of 2.80.

These are just a handful of the figures considered in Crescent Point Energy'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 CPG is an impressive value stock right now.


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