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Are Investors Undervaluing Crescent Point Energy (CPG) 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, 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 Crescent Point Energy (CPG). 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 9.48 right now. For comparison, its industry sports an average P/E of 11.55. CPG's Forward P/E has been as high as 25.41 and as low as -16.13, with a median of 13.18, all within the past year.

Another notable valuation metric for CPG is its P/B ratio of 0.38. 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 solid versus its industry's average P/B of 0.94. Over the past year, CPG's P/B has been as high as 0.62 and as low as 0.22, with a median of 0.37.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. 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 0.65. This compares to its industry's average P/S of 0.89.

Finally, our model also underscores that CPG has a P/CF ratio of 0.90. 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 3.44. Over the past 52 weeks, CPG's P/CF has been as high as 4.60 and as low as 0.65, with a median of 1.09.

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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