Should Value Investors Buy RPC (RES) Stock?

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is RPC (RES). RES is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 9.74, which compares to its industry's average of 11.75. Over the past 52 weeks, RES's Forward P/E has been as high as 20.62 and as low as 6.43, with a median of 10.97.

We should also highlight that RES has a P/B ratio of 0.92. 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 solid versus its industry's average P/B of 1.78. Within the past 52 weeks, RES's P/B has been as high as 1.52 and as low as 0.88, with a median of 1.22.

Finally, we should also recognize that RES has a P/CF ratio of 4.52. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.92. RES's P/CF has been as high as 6.73 and as low as 4.33, with a median of 5.39, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that RPC is likely undervalued currently. And when considering the strength of its earnings outlook, RES sticks out at 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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