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Should Value Investors Buy Crescent Point Energy (CPG) Stock?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 Crescent Point Energy (CPG). CPG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

We should also highlight that CPG has a P/B ratio of 0.51. 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. This company's current P/B looks solid when compared to its industry's average P/B of 0.94. CPG's P/B has been as high as 0.54 and as low as 0.26, with a median of 0.38, over the past year.

Finally, we should also recognize that CPG has a P/CF ratio of 1.16. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CPG's P/CF compares to its industry's average P/CF of 3.35. Over the past 52 weeks, CPG's P/CF has been as high as 1.22 and as low as 0.65, with a median of 0.91.

Value investors will likely look at more than just these metrics, but the above data helps show that Crescent Point Energy is likely undervalued currently. And when considering the strength of its earnings outlook, CPG sticks out at as one of the market's strongest value stocks.


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