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Should Value Investors Buy California Resources (CRC) Stock?

Zacks Equity Research
Is (HRS) Outperforming Other Computer and Technology Stocks This Year?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 stock to keep an eye on is California Resources (CRC). CRC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 4.76, which compares to its industry's average of 10.92. Over the last 12 months, CRC's Forward P/E has been as high as 50.92 and as low as -852.06, with a median of -4.38.

Finally, investors should note that CRC has a P/CF ratio of 5.41. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. CRC's P/CF compares to its industry's average P/CF of 6.21. Over the past year, CRC's P/CF has been as high as 33.90 and as low as 1.64, with a median of 7.28.

Value investors will likely look at more than just these metrics, but the above data helps show that California Resources is likely undervalued currently. And when considering the strength of its earnings outlook, CRC sticks out at as one of the market's strongest value stocks.


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