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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Murphy Oil (MUR). MUR is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
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. MUR has a P/S ratio of 1.94. This compares to its industry's average P/S of 1.95.
Finally, investors should note that MUR has a P/CF ratio of 3.21. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 4.90. MUR's P/CF has been as high as 4.03 and as low as 2.28, with a median of 3.13, all within the past year.
Ring Energy (REI) may be another strong Oil and Gas - Exploration and Production - United States stock to add to your shortlist. REI is a Zacks Rank of #2 (Buy) stock with a Value grade of A.
Ring Energy also has a P/B ratio of 0.23 compared to its industry's price-to-book ratio of 2.98. Over the past year, its P/B ratio has been as high as 0.42, as low as 0.17, with a median of 0.27.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Murphy Oil and Ring Energy are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MUR and REI feels like a great value stock at the moment.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power .
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum 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
Murphy Oil Corporation (MUR): Free Stock Analysis Report
Ring Energy, Inc. (REI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).