Are Investors Undervaluing Eni (E) Right Now?

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.

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 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.

Eni (E) is a stock many investors are watching right now. E is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 10.33, which compares to its industry's average of 10.46. Over the last 12 months, E's Forward P/E has been as high as 10.97 and as low as 6.79, with a median of 8.05.

Investors should also recognize that E has a P/B ratio of 0.97. The P/B ratio is used to compare a stock's market value with 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 1.96. E's P/B has been as high as 1.00 and as low as 0.70, with a median of 0.85, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. E has a P/S ratio of 0.92. This compares to its industry's average P/S of 1.02.

Finally, we should also recognize that E has a P/CF ratio of 4.96. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. E's current P/CF looks attractive when compared to its industry's average P/CF of 7.12. Within the past 12 months, E's P/CF has been as high as 5.13 and as low as 3.64, with a median of 4.30.

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

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This article originally published on Zacks Investment Research (zacks.com).

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