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Here's Why Diamondback Energy (FANG) is a Strong Value Stock

Zacks Equity Research
·2-min read

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

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Diamondback Energy (FANG)

Founded in 2007, Midland, TX-headquartered Diamondback Energy, Inc. is an independent oil and gas exploration & production company with its primary focus on the Permian Basin, where it has more than 490,000 net acres. Its activities are concentrated in the Wolfcamp, Spraberry and Bone Spring formations.

FANG is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of A. Shares are currently trading at a forward P/E of 9.8X for the current fiscal year compared to the Oil and Gas - Exploration and Production - United States industry's P/E of 9.6X. Additionally, FANG has a PEG Ratio of 1 and a Price/Cash Flow ratio of 6.7X. Value investors should also note FANG's Price/Sales ratio of 3.8X.

A company's earnings performance is important for value investors as well. For fiscal 2024, seven analysts revised their earnings estimate higher in the last 60 days for FANG, while the Zacks Consensus Estimate has increased $0.52 to $19.05 per share. FANG also holds an average earnings surprise of 3.4%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding FANG to their portfolios.

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Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research