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Is Golar LNG Partners LP (GMLP) Stock Undervalued Right Now?

Zacks Equity Research
Does Dentsply International (XRAY) have what it takes to be a top stock pick for momentum investors? Let's find out.

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Golar LNG Partners LP (GMLP). GMLP is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 12.04 right now. For comparison, its industry sports an average P/E of 19.13. Over the last 12 months, GMLP's Forward P/E has been as high as 17.30 and as low as 9.31, with a median of 12.44.

Investors will also notice that GMLP has a PEG ratio of 1.50. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GMLP's PEG compares to its industry's average PEG of 3.02. Over the past 52 weeks, GMLP's PEG has been as high as 2.16 and as low as 1.16, with a median of 1.55.

Another notable valuation metric for GMLP is its P/B ratio of 1.42. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.44. Over the past 12 months, GMLP's P/B has been as high as 2.11 and as low as 1.09, with a median of 1.57.

Finally, investors will want to recognize that GMLP has a P/CF ratio of 4.12. 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 stock's P/CF looks attractive against its industry's average P/CF of 6.59. Over the past 52 weeks, GMLP's P/CF has been as high as 6.32 and as low as 3.17, with a median of 4.78.

These are just a handful of the figures considered in Golar LNG Partners LP's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GMLP is an impressive value stock right now.


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