Should We Buy the Conoco Phillips (NYSE:COP) stock?

A couple of months back, analysts investigated whether it was a decent time to buy Conoco Phillips’ (NYSE:COP) stock. Around then, they presumed that the stock was estimated in a reasonable manner overall contrasted with its average of the past years since the splitting off of Phillips 66 (NYSE:PSX) in 2012, at that time which suggested that it was a fine time to purchase the stocks of the company. Doubtlessly, the stock has just gotten less expensive since then, as the oil market went insane, which took the value of ConocoPhillips’ stock to a steep low.

Conoco Philips’ (NYSE:COP) stock has fallen 20% in a short couple of weeks, which puts the stock 26% off from its perpetual high of 52 weeks. Thus, the stock cost is now less expensive than it was in September. Nonetheless, the price of the stock is not always the same as the value of the stock, so we should examine how the value of Conoco Phillips’ (NYSE:COP) stock contrasts with its verifiable averages to check whether or not now is truly the best time to purchase the stock of Conoco Philip (NYSE:COP).

There are various approaches taken to determine the value of a stock. Most investors and analysts are acquainted with the cost to-profit ratio, which lets us know the extent to which we are paying for a stock’s income. In any case, it is not wise to utilize that metric to value the vitality of an organization, as profit can be influenced by an organization’s gas and oil hedges and other modifications to its reserves. That is the reason most analysts like to take a view at a valuation of different multiples to get a more extensive picture of value.

If we look at the current scenario with the past five year data then we could know where the stocks stand, the spin off seems a justified decision because the company valuation increased greatly after the company Phillips 66 (NYSE:PSX) was sold off. However, the low oil prices of late have made the company lose immense value which is good news for long term investors which can stock up on shares with the condition that they believe the oil prices to rise eventually.

Many people on Wall Street are speculating that this is the best time to buy the shares of Conoco Philip (NYSE:COP). However we have to take this analysis with a pinch of salt because if the low oil prices are a permanent phenomenon then this analysis would render incorrect reason being the company’s potential for future earnings. Its assets would also lose value if the oil prices were to stay low for long.