Are These Oils-Energy Stocks Undervalued Right Now?
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.
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.
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 Oceaneering International (OII). OII is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another valuation metric that we should highlight is OII's P/B ratio of 2.42. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. OII's current P/B looks attractive when compared to its industry's average P/B of 2.95. Over the past year, OII's P/B has been as high as 3.31 and as low as 1.50, with a median of 2.30.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. OII has a P/S ratio of 0.72. This compares to its industry's average P/S of 0.87.
ProPetro Holding (PUMP) may be another strong Oil and Gas - Field Services stock to add to your shortlist. PUMP is a # 2 (Buy) stock with a Value grade of A.
ProPetro Holding sports a P/B ratio of 1.29 as well; this compares to its industry's price-to-book ratio of 2.95. In the past 52 weeks, PUMP's P/B has been as high as 1.59, as low as 0.80, with a median of 1.15.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Oceaneering International and ProPetro Holding are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OII and PUMP feels like a great value stock at the moment.
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Oceaneering International, Inc. (OII) : Free Stock Analysis Report
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