Is City Office REIT (CIO) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 company to watch right now is City Office REIT (CIO). CIO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.85 right now. For comparison, its industry sports an average P/E of 17. Over the past 52 weeks, CIO's Forward P/E has been as high as 16.19 and as low as 7, with a median of 10.66.
CIO is also sporting a PEG ratio of 1.31. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CIO's PEG compares to its industry's average PEG of 2.33. Over the last 12 months, CIO's PEG has been as high as 2.70 and as low as 1.17, with a median of 1.77.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CIO has a P/S ratio of 3.28. This compares to its industry's average P/S of 5.05.
If you're looking for another solid REIT and Equity Trust - Other value stock, take a look at Paramount Group (PGRE). PGRE is a # 2 (Buy) stock with a Value score of A.
Paramount Group is trading at a forward earnings multiple of 7.55 at the moment, with a PEG ratio of 11.33. This compares to its industry's average P/E of 17 and average PEG ratio of 2.33.
PGRE's Forward P/E has been as high as 11.85 and as low as 7.45, with a median of 9.92. During the same time period, its PEG ratio has been as high as 11.62, as low as 0.45, with a median of 9.08.
Additionally, Paramount Group has a P/B ratio of 0.36 while its industry's price-to-book ratio sits at 2.52. For PGRE, this valuation metric has been as high as 0.55, as low as 0.35, with a median of 0.44 over the past year.
These are only a few of the key metrics included in City Office REIT and Paramount Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CIO and PGRE look like an impressive value stock at the moment.
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City Office REIT, Inc. (CIO) : Free Stock Analysis Report
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