Are Investors Undervaluing Centennial Resource Development (CDEV) Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 company to watch right now is Centennial Resource Development (CDEV). CDEV is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 2.83, while its industry has an average P/E of 5.22. Over the last 12 months, CDEV's Forward P/E has been as high as 13.67 and as low as 2.42, with a median of 6.23.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CDEV has a P/S ratio of 1.59. This compares to its industry's average P/S of 2.23.

Finally, investors should note that CDEV has a P/CF ratio of 4.03. 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. CDEV's P/CF compares to its industry's average P/CF of 10.71. Within the past 12 months, CDEV's P/CF has been as high as 17.36 and as low as 3.44, with a median of 6.12.

Geopark (GPRK) may be another strong Oil and Gas - Exploration and Production - United States stock to add to your shortlist. GPRK is a # 1 (Strong Buy) stock with a Value grade of A.

Additionally, Geopark has a P/B ratio of -19.82 while its industry's price-to-book ratio sits at 3.24. For GPRK, this valuation metric has been as high as -5.22, as low as -29.55, with a median of -13.02 over the past year.

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

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