Is Southwestern Energy (SWN) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company value investors might notice is Southwestern Energy (SWN). SWN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 10.41, while its industry has an average P/E of 18.75. SWN's Forward P/E has been as high as 16.15 and as low as 2.80, with a median of 5.25, all within the past year.
Investors should also note that SWN holds a PEG ratio of 0.66. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SWN's PEG compares to its industry's average PEG of 1.60. SWN's PEG has been as high as 0.76 and as low as 0.31, with a median of 0.48, all within the past year.
We should also highlight that SWN has a P/B ratio of 1.03. 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 1.89. Within the past 52 weeks, SWN's P/B has been as high as 1.03 and as low as 0.21, with a median of 0.36.
These are only a few of the key metrics included in Southwestern Energy's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SWN looks like an impressive value stock at the moment.
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