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Is Crescent Point Energy (CPG) a Great Value Stock Right Now?

Zacks Equity Research

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, 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Crescent Point Energy (CPG). CPG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.06, which compares to its industry's average of 10.98. Over the past year, CPG's Forward P/E has been as high as 25.41 and as low as -16.13, with a median of 13.45.

Another valuation metric that we should highlight is CPG's P/B ratio of 0.38. 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. CPG's current P/B looks attractive when compared to its industry's average P/B of 0.95. Over the past 12 months, CPG's P/B has been as high as 0.62 and as low as 0.22, with a median of 0.38.

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. CPG has a P/S ratio of 0.64. This compares to its industry's average P/S of 0.87.

Finally, investors will want to recognize that CPG has a P/CF ratio of 0.91. 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. This stock's P/CF looks attractive against its industry's average P/CF of 3.48. Within the past 12 months, CPG's P/CF has been as high as 4.60 and as low as 0.65, with a median of 1.80.

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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