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.
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 Occidental Petroleum (OXY). OXY is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
We should also highlight that OXY has a P/B ratio of 1.63. The P/B is a method of comparing a stock's market value to 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 1.77. Over the past 12 months, OXY's P/B has been as high as 1.94 and as low as 1.27, with a median of 1.65.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. OXY has a P/S ratio of 2.41. This compares to its industry's average P/S of 2.98.
Finally, we should also recognize that OXY has a P/CF ratio of 4.59. 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. OXY's P/CF compares to its industry's average P/CF of 5.48. OXY's P/CF has been as high as 4.78 and as low as 3.32, with a median of 4.31, all within the past year.
These are just a handful of the figures considered in Occidental Petroleum'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 OXY is an impressive value stock right now.
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Occidental Petroleum Corporation (OXY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).