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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
CNOOC (CEO) is a stock many investors are watching right now. CEO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 10.04 right now. For comparison, its industry sports an average P/E of 14.87. CEO’s Forward P/E has been as high as 24.17 and as low as 6.91, with a median of 9.96, all within the past year.
We also note that CEO holds a PEG ratio of 1.51. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company’s expected EPS growth rate. CEO’s PEG compares to its industry’s average PEG of 2.10. CEO’s PEG has been as high as 3.64 and as low as 1.04, with a median of 1.78, all within the past year.
Investors should also recognize that CEO has a P/B ratio of 0.75. The P/B ratio is used to compare a stock’s market value with its book value, which is defined as total assets minus total liabilities. CEO’s current P/B looks attractive when compared to its industry’s average P/B of 1.62. Over the past 12 months, CEO’s P/B has been as high as 1.25 and as low as 0.59, with a median of 0.85.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CNOOC is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CEO feels like a great value stock at the moment.
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