Is Ring Energy (REI) Stock 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Ring Energy (REI). REI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 2.62. This compares to its industry's average Forward P/E of 5.59. Over the past 52 weeks, REI's Forward P/E has been as high as 12.38 and as low as 2.02, with a median of 4.38.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. REI has a P/S ratio of 1.36. This compares to its industry's average P/S of 1.76.
Finally, investors will want to recognize that REI has a P/CF ratio of 2.92. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.86. Over the past 52 weeks, REI's P/CF has been as high as 11.77 and as low as -3.55, with a median of 3.30.
If you're looking for another solid Oil and Gas - Exploration and Production - United States value stock, take a look at Stone Energy (TALO). TALO is a # 2 (Buy) stock with a Value score of A.
Stone Energy sports a P/B ratio of 1.98 as well; this compares to its industry's price-to-book ratio of 3.30. In the past 52 weeks, TALO's P/B has been as high as 2.99, as low as 1.05, with a median of 1.65.
These are only a few of the key metrics included in Ring Energy and Stone Energy strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, REI and TALO look like an impressive value stock at the moment.
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