Back to top

Image: Bigstock

Should Value Investors Buy OMV (OMVJF) Stock?

Read MoreHide Full Article

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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is OMV (OMVJF - Free Report) . OMVJF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 3.23 right now. For comparison, its industry sports an average P/E of 6.37. Over the last 12 months, OMVJF's Forward P/E has been as high as 6.65 and as low as 3.11, with a median of 4.53.

We should also highlight that OMVJF has a P/B ratio of 0.50. 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 1.43. Within the past 52 weeks, OMVJF's P/B has been as high as 0.87 and as low as 0.48, with a median of 0.66.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. OMVJF has a P/S ratio of 0.25. This compares to its industry's average P/S of 0.45.

Finally, investors will want to recognize that OMVJF has a P/CF ratio of 1.76. 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. OMVJF's P/CF compares to its industry's average P/CF of 5.13. Over the past 52 weeks, OMVJF's P/CF has been as high as 3.13 and as low as 1.70, with a median of 2.34.

Repsol (REPYY - Free Report) may be another strong Oil and Gas - Integrated - International stock to add to your shortlist. REPYY is a # 2 (Buy) stock with a Value grade of A.

Shares of Repsol are currently trading at a forward earnings multiple of 3.27 and a PEG ratio of 0.42 compared to its industry's P/E and PEG ratios of 6.37 and 0.47, respectively.

REPYY's Forward P/E has been as high as 7.05 and as low as 2.94, with a median of 4.82. During the same time period, its PEG ratio has been as high as 1.22, as low as 0.11, with a median of 0.41.

Additionally, Repsol has a P/B ratio of 0.69 while its industry's price-to-book ratio sits at 1.43. For REPYY, this valuation metric has been as high as 0.96, as low as 0.61, with a median of 0.74 over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that OMV and Repsol are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OMVJF and REPYY feels like a great value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Repsol SA (REPYY) - free report >>

OMV AG (OMVJF) - free report >>

Published in