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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company value investors might notice is Occidental Petroleum (OXY). OXY is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
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. OXY has a P/S ratio of 2.3. This compares to its industry's average P/S of 2.92.
Finally, our model also underscores that OXY has a P/CF ratio of 4.59. 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. OXY's current P/CF looks attractive when compared to its industry's average P/CF of 4.98. Over the past 52 weeks, OXY's P/CF has been as high as 4.78 and as low as 3.32, with a median of 4.31.
Value investors will likely look at more than just these metrics, but the above data helps show that Occidental Petroleum is likely undervalued currently. And when considering the strength of its earnings outlook, OXY sticks out as one of the market's strongest value stocks.
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Occidental Petroleum Corporation (OXY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).