Should Value Investors Buy Repsol (REPYY) 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 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 stock to keep an eye on is Repsol (REPYY). REPYY is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.48. This compares to its industry's average Forward P/E of 12.03. Over the last 12 months, REPYY's Forward P/E has been as high as 6.17 and as low as 3.98, with a median of 4.97.

We should also highlight that REPYY has a P/B ratio of 0.65. 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 1.75. Within the past 52 weeks, REPYY's P/B has been as high as 0.65 and as low as 0.41, with a median of 0.50.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. REPYY has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.61.

Finally, investors should note that REPYY has a P/CF ratio of 5.38. 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. REPYY's P/CF compares to its industry's average P/CF of 6.45. Over the past year, REPYY's P/CF has been as high as 5.39 and as low as 2.06, with a median of 3.03.

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

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

Zacks Investment Research

Source Zacks-com