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Is Northern Oil and Gas (NOG) a Great Value Stock 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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is Northern Oil and Gas (NOG). NOG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors should also recognize that NOG has a P/B ratio of 1.96. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.01. NOG's P/B has been as high as 129.09 and as low as -7.94, with a median of 2.17, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. NOG has a P/S ratio of 1.27. This compares to its industry's average P/S of 1.46.

Finally, our model also underscores that NOG has a P/CF ratio of 3.17. 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. NOG's P/CF compares to its industry's average P/CF of 4.78. Over the past year, NOG's P/CF has been as high as 4.37 and as low as -326.27, with a median of 2.61.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Northern Oil and Gas is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NOG feels like a great value stock at the moment.


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