Are Investors Undervaluing Gran Tierra Energy (GTE) 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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Gran Tierra Energy (GTE) is a stock many investors are watching right now. GTE is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.75. This compares to its industry's average Forward P/E of 11.88. Over the past 52 weeks, GTE's Forward P/E has been as high as 15.16 and as low as 6.03, with a median of 10.39.

Another valuation metric that we should highlight is GTE's P/B ratio of 0.37. 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 stock's P/B looks attractive against its industry's average P/B of 0.80. GTE's P/B has been as high as 1.28 and as low as 0.37, with a median of 0.84, over the past year.

Finally, our model also underscores that GTE has a P/CF ratio of 1.28. 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 stock's P/CF looks attractive against its industry's average P/CF of 2.82. Over the past 52 weeks, GTE's P/CF has been as high as 5.86 and as low as 1.28, with a median of 2.85.

These are just a handful of the figures considered in Gran Tierra Energy's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GTE is an impressive value stock right now.

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