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Should Value Investors Buy Crescent Point Energy (CPG) Stock?

Zacks Equity Research

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Crescent Point Energy (CPG). CPG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Another valuation metric that we should highlight is CPG's P/B ratio of 0.51. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. CPG's current P/B looks attractive when compared to its industry's average P/B of 0.94. Over the past year, CPG's P/B has been as high as 0.54 and as low as 0.22, with a median of 0.35.

Finally, investors will want to recognize that CPG has a P/CF ratio of 1.11. 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. CPG's P/CF compares to its industry's average P/CF of 3.11. Over the past 52 weeks, CPG's P/CF has been as high as 4.13 and as low as 0.65, with a median of 0.90.

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


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