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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Antero Resources (AR) is a stock many investors are watching right now. AR is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.24 right now. For comparison, its industry sports an average P/E of 10.44. Over the last 12 months, AR's Forward P/E has been as high as 374.60 and as low as 7.90, with a median of 11.46.
Another notable valuation metric for AR is its P/B ratio of 1.31. 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 attractive against its industry's average P/B of 2.99. Within the past 52 weeks, AR's P/B has been as high as 1.84 and as low as 1.11, with a median of 1.45.
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. AR has a P/S ratio of 1.94. This compares to its industry's average P/S of 1.97.
Finally, investors should note that AR has a P/CF ratio of 7.94. 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. AR's current P/CF looks attractive when compared to its industry's average P/CF of 11.74. Within the past 12 months, AR's P/CF has been as high as 17.33 and as low as 7.48, with a median of 13.15.
Chord Energy Corporation (CHRD) may be another strong Oil and Gas - Exploration and Production - United States stock to add to your shortlist. CHRD is a Zacks Rank of #2 (Buy) stock with a Value grade of A.
Shares of Chord Energy Corporation currently hold a Forward P/E ratio of 11.01, and its PEG ratio is 7.37. In comparison, its industry sports average P/E and PEG ratios of 10.44 and 1.00.
CHRD's Forward P/E has been as high as 12.38 and as low as 6.26, with a median of 8.29. During the same time period, its PEG ratio has been as high as 7.90, as low as 4.15, with a median of 5.35.
Chord Energy Corporation also has a P/B ratio of 0.72 compared to its industry's price-to-book ratio of 2.99. Over the past year, its P/B ratio has been as high as 0.97, as low as 0.57, with a median of 0.78.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Antero Resources and Chord Energy Corporation are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AR and CHRD feels like a great value stock at the moment.
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Antero Resources Corporation (AR): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).