Are Investors Undervaluing Murphy Oil (MUR) Right Now?

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Murphy Oil (MUR). MUR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 18.38. This compares to its industry's average Forward P/E of 19.54. Over the past year, MUR's Forward P/E has been as high as 92.16 and as low as 11.17, with a median of 20.07.

Finally, investors will want to recognize that MUR has a P/CF ratio of 1.52. 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. MUR's P/CF compares to its industry's average P/CF of 5.44. MUR's P/CF has been as high as 4.01 and as low as 1.23, with a median of 2.84, all within the past year.

These are only a few of the key metrics included in Murphy Oil'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, MUR looks like an impressive value stock at the moment.

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