Should Value Investors Buy Bonanza Creek Energy (BCEI) 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.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is Bonanza Creek Energy (BCEI). BCEI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.39. This compares to its industry's average Forward P/E of 18.65. Over the last 12 months, BCEI's Forward P/E has been as high as 10.64 and as low as 1.93, with a median of 3.44.
Finally, investors should note that BCEI has a P/CF ratio of 1.69. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BCEI's current P/CF looks attractive when compared to its industry's average P/CF of 5.44. BCEI's P/CF has been as high as 3.65 and as low as 0.99, with a median of 1.81, all within the past year.
These are just a handful of the figures considered in Bonanza Creek Energy's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BCEI is an impressive value stock right now.
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
Bonanza Creek Energy, Inc. (BCEI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
