Are Investors Undervaluing Crescent Point Energy (CPG) Right Now?
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...
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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Crescent Point Energy (CPG) is a stock many investors are watching right now. CPG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 3.11 right now. For comparison, its industry sports an average P/E of 7.11. Over the past year, CPG's Forward P/E has been as high as 1,525.18 and as low as -287.39, with a median of 6.29.
Another notable valuation metric for CPG is its P/B ratio of 0.69. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. CPG's current P/B looks attractive when compared to its industry's average P/B of 1.43. CPG's P/B has been as high as 1.24 and as low as 0.29, with a median of 0.68, over the past year.
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. CPG has a P/S ratio of 1.48. This compares to its industry's average P/S of 1.78.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Crescent Point Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CPG feels like a great value stock at the moment.
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Crescent Point Energy Corporation (CPG): Free Stock Analysis Report
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