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.
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 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 Northern Oil and Gas (NOG). NOG is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.22 right now. For comparison, its industry sports an average P/E of 10.57. Over the past year, NOG's Forward P/E has been as high as 8.09 and as low as 4.43, with a median of 6.75.
Investors should also recognize that NOG has a P/B ratio of 1.01. Investors use the P/B ratio to look at a stock's market value versus 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 2.92. Over the past year, NOG's P/B has been as high as 1.88 and as low as 0.85, with a median of 1.28.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NOG has a P/S ratio of 1.43. This compares to its industry's average P/S of 1.89.
These are only a few of the key metrics included in Northern Oil and Gas'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, NOG looks like an impressive value stock at the moment.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks 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
Northern Oil and Gas, Inc. (NOG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).