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Should Value Investors Buy Eni (E) Stock?

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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Eni (E - Free Report) is a stock many investors are watching right now. E is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 6.28. This compares to its industry's average Forward P/E of 9.32. E's Forward P/E has been as high as 6.28 and as low as 3.12, with a median of 4.89, all within the past year.

Investors will also notice that E has a PEG ratio of 0.44. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. E's PEG compares to its industry's average PEG of 0.68. Over the past 52 weeks, E's PEG has been as high as 0.44 and as low as 0.30, with a median of 0.34.

Another valuation metric that we should highlight is E's P/B ratio of 0.94. The P/B is a method of comparing a stock's market value to 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 1.41. E's P/B has been as high as 0.98 and as low as 0.65, with a median of 0.88, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. E has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.58.

Finally, investors will want to recognize that E has a P/CF ratio of 3.03. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 4.50. Over the past year, E's P/CF has been as high as 3.03 and as low as 1.44, with a median of 2.27.

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


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