Are Investors Undervaluing RPC (RES) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

RPC (RES) is a stock many investors are watching right now. RES is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.

Investors should also recognize that RES has a P/B ratio of 0.91. 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 2.05. Over the past year, RES's P/B has been as high as 1.43 and as low as 0.88, with a median of 1.08.

Finally, our model also underscores that RES has a P/CF ratio of 4.93. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. RES's P/CF compares to its industry's average P/CF of 8.43. Within the past 12 months, RES's P/CF has been as high as 6.73 and as low as 4.33, with a median of 5.19.

If you're looking for another solid Oil and Gas - Field Services value stock, take a look at Subsea 7 (SUBCY). SUBCY is a Zacks Rank of #2 (Buy) stock with a Value score of A.

Subsea 7 sports a P/B ratio of 1.39 as well; this compares to its industry's price-to-book ratio of 2.05. In the past 52 weeks, SUBCY's P/B has been as high as 1.45, as low as 0.89, with a median of 1.15.

Value investors will likely look at more than just these metrics, but the above data helps show that RPC and Subsea 7 are likely undervalued currently. And when considering the strength of its earnings outlook, RES and SUBCY sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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