Should Value Investors Buy Eni (E) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Eni (E). E is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A.

We should also highlight that E has a P/B ratio of 0.97. The P/B ratio pits a stock's market value against 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 2.38. 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 use the P/S ratio. The P/S ratio is calculated as price divided by 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 0.95. This compares to its industry's average P/S of 1.04.

Finally, investors should note that E has a P/CF ratio of 4.96. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.23. 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.

These are just a handful of the figures considered in Eni's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that E is an impressive value stock right now.

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

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