Should value investors buy Permian Resources Corporation (PR) shares?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Still, we know that each of our readers has their own perspective, so we always monitor the latest trends in value, growth and momentum to find strong picks.

Looking at the history of these trends, arguably none is more popular than value investing. This strategy simply aims to identify companies that are undervalued by the broader market. Value investors use a variety of methods, including tried-and-tested valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors can also use our innovative Style Scores system to find stocks with specific traits. For example, value investors should focus on the Value category. Stocks with high Zacks Ranks and “A” grades for Value are among the highest-quality value stocks on the market today.

Permian Resources Corporation (PR) is a stock that is currently being watched by many investors. PR currently has a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a P/E ratio of 3.98, while the industry average is 5.82. Over the past year, PR’s Forward P/E has been as high as 10.51 and as low as 2.42, with a median of 5.25.

Finally, our model also highlights that PR has a P/CF ratio of 4. This metric focuses on a company’s operating cash flow and is often used to find stocks that are undervalued due to their strong cash outlook. This company’s current P/CF looks solid compared to its industry’s average P/CF of 8.21. PR’s P/CF has been as high as 13.30 and 2.38 over the past year, with a median of 5.53.

Investors should also consider Ring Energy (REI)a stock in the U.S. Oil & Gas – Exploration and Production sector with a Zacks Rank of #1 (Strong Buy) and a Score of A.

Ring Energy also has a P/B ratio of 1.04, the highest in the industry for a price-to-book ratio is 3.45. Over the past 52 weeks, REI’s P/B ratio has ranged from 1.61 to 0.65, with a median of 0.97.

Value investors will likely look at more than just these metrics, but the data above shows that Permian Resources Corporation and Ring Energy are likely undervalued right now. And when you consider the strength of their earnings outlooks, PR and REI stand out as some of the market’s strongest value stocks.

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