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Are Investors Undervaluing Eclipse Resources (ECR) Right Now?

Zacks Equity Research
Updated
Ranger Energy Services, Inc. (RNGR) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company to watch right now is Eclipse Resources (ECR). ECR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

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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. ECR has a P/S ratio of 0.75. This compares to its industry's average P/S of 2.07.

Finally, our model also underscores that ECR has a P/CF ratio of 4.02. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.25. Over the past 52 weeks, ECR's P/CF has been as high as 8.93 and as low as 2.65, with a median of 4.67.

These are only a few of the key metrics included in Eclipse Resources's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ECR looks like an impressive value stock at the moment.


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