Should Value Investors Buy Baytex Energy (BTE) Stock?
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Baytex Energy (BTE) is a stock many investors are watching right now. BTE is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.85. This compares to its industry's average Forward P/E of 11.20. Over the past 52 weeks, BTE's Forward P/E has been as high as 7.69 and as low as 4.73, with a median of 6.46.
Investors should also recognize that BTE has a P/B ratio of 0.98. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.86. Over the past 12 months, BTE's P/B has been as high as 1.11 and as low as 0.71, with a median of 0.92.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. BTE has a P/S ratio of 1.13. This compares to its industry's average P/S of 1.83.
Finally, our model also underscores that BTE has a P/CF ratio of 4.67. 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 5.33. Within the past 12 months, BTE's P/CF has been as high as 4.83 and as low as 1.45, with a median of 2.14.
If you're looking for another solid Oil and Gas - Exploration and Production - Canadian value stock, take a look at Crescent Point Energy (CPG). CPG is a # 2 (Buy) stock with a Value score of A.
Crescent Point Energy sports a P/B ratio of 0.96 as well; this compares to its industry's price-to-book ratio of 1.86. In the past 52 weeks, CPG's P/B has been as high as 1.04, as low as 0.64, with a median of 0.85.
These are only a few of the key metrics included in Baytex Energy and Crescent Point 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, BTE and CPG look like an impressive value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Baytex Energy Corp (BTE) : Free Stock Analysis Report
Crescent Point Energy Corporation (CPG) : Free Stock Analysis Report
