Is Keane Group, Inc. (NEX) Stock Undervalued Right Now?
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Keane Group, Inc. (NEX) is a stock many investors are watching right now. NEX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
We should also highlight that NEX has a P/B ratio of 0.65. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.49. NEX's P/B has been as high as 1.66 and as low as 0.25, with a median of 1.17, over the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NEX has a P/S ratio of 0.23. This compares to its industry's average P/S of 0.26.
Value investors will likely look at more than just these metrics, but the above data helps show that Keane Group, Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, NEX sticks out at as one of the market's strongest value stocks.
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