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Is Ring Energy (REI) Stock Undervalued Right Now?

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Zacks Equity Research
·2 min read
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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Ring Energy (REI). REI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 11.07, which compares to its industry's average of 18.50. Over the last 12 months, REI's Forward P/E has been as high as 31.11 and as low as -88.36, with a median of 3.56.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. REI has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.59.

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


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Zacks Investment Research