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Is Atlantic Power (AT) a Great Value Stock Right Now?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

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 Atlantic Power (AT). AT is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.72, which compares to its industry's average of 13.94. Over the past 52 weeks, AT's Forward P/E has been as high as 25.08 and as low as -30.13, with a median of 4.55.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AT has a P/S ratio of 0.96. This compares to its industry's average P/S of 2.04.

Finally, investors will want to recognize that AT has a P/CF ratio of 3.13. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.61. Within the past 12 months, AT's P/CF has been as high as 8.37 and as low as 2.35, with a median of 3.64.

These are only a few of the key metrics included in Atlantic Power's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AT looks like an impressive value stock at the moment.


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