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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Repsol, S.A. (REPYY - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Repsol has a trailing twelve months PE ratio of 10.61, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.22. If we focus on the long-term PE trend, Repsol’s current PE level puts it below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Oil and Gas - Integrated – International industry’s trailing twelve months PE ratio, which stands at 25.75. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Repsol has a forward PE ratio (price relative to this year’s earnings) of just 9.38, so it is fair to say that a slightly more value-oriented path may be ahead for Repsol stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Repsol has a P/S ratio of about 0.60. This is far lower than the S&P 500 average, which comes in at 3.13 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Repsol currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Repsol a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio comes in at 4.07, which is far better than the industry average of 6.04. Clearly, REPYY is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Repsol might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘B’ and a Momentum score of ‘A’. This gives REPYY a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty encouraging. The current year has seen one estimate going higher in the past sixty days compared to none lower, while the next year estimate has seen one upward and no downward movement in the same time period.
This has had a significant impact on the consensus estimate as the current year consensus estimate has risen by 13.9% in the past two months, while the next year estimate has gone up by 30%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #2 (Buy) indicates robust fundamentals and expectations of outperformance in the near term.
Bottom Line
Repsol is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (Bottom 25% out of more than 250 industries), it is hard to get too excited about this company overall. In fact, over the past two years, the Zacks Oil and Gas - Integrated – International industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for the broader factors to turn around in this name first, but once that happens, this stock could be a compelling pick.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Could Repsol (REPYY) Stock Be a Great Value Pick?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Repsol, S.A. (REPYY - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Repsol has a trailing twelve months PE ratio of 10.61, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.22. If we focus on the long-term PE trend, Repsol’s current PE level puts it below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Oil and Gas - Integrated – International industry’s trailing twelve months PE ratio, which stands at 25.75. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Repsol has a forward PE ratio (price relative to this year’s earnings) of just 9.38, so it is fair to say that a slightly more value-oriented path may be ahead for Repsol stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Repsol has a P/S ratio of about 0.60. This is far lower than the S&P 500 average, which comes in at 3.13 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Repsol currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Repsol a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio comes in at 4.07, which is far better than the industry average of 6.04. Clearly, REPYY is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Repsol might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘B’ and a Momentum score of ‘A’. This gives REPYY a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty encouraging. The current year has seen one estimate going higher in the past sixty days compared to none lower, while the next year estimate has seen one upward and no downward movement in the same time period.
This has had a significant impact on the consensus estimate as the current year consensus estimate has risen by 13.9% in the past two months, while the next year estimate has gone up by 30%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Repsol SA Price and Consensus
Repsol SA Price and Consensus | Repsol SA Quote
This positive trend signifies bullish analyst sentiment, and its Zacks Rank #2 (Buy) indicates robust fundamentals and expectations of outperformance in the near term.
Bottom Line
Repsol is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (Bottom 25% out of more than 250 industries), it is hard to get too excited about this company overall. In fact, over the past two years, the Zacks Oil and Gas - Integrated – International industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for the broader factors to turn around in this name first, but once that happens, this stock could be a compelling pick.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>