Should Value Investors Buy Amplify Energy (AMPY) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company value investors might notice is Amplify Energy (AMPY). AMPY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 4.57 right now. For comparison, its industry sports an average P/E of 10.16. Over the past year, AMPY's Forward P/E has been as high as 7.08 and as low as 0.68, with a median of 4.45.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AMPY has a P/S ratio of 0.9. This compares to its industry's average P/S of 2.02.
Finally, investors should note that AMPY has a P/CF ratio of 4.21. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. AMPY's current P/CF looks attractive when compared to its industry's average P/CF of 7.67. Over the past 52 weeks, AMPY's P/CF has been as high as 4.67 and as low as 0.50, with a median of 0.61.
Another great Oil and Gas - Exploration and Production - United States stock you could consider is Ring Energy (REI), which is a # 2 (Buy) stock with a Value Score of A.
Ring Energy also has a P/B ratio of 0.45 compared to its industry's price-to-book ratio of 2.43. Over the past year, its P/B ratio has been as high as 0.64, as low as 0.31, with a median of 0.46.
These are just a handful of the figures considered in Amplify Energy and Ring 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 AMPY and REI is an impressive value stock right now.
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Amplify Energy Corp. (AMPY) : Free Stock Analysis Report
Ring Energy, Inc. (REI) : Free Stock Analysis Report