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Is Hersha Hospitality (HT) a Great Value Stock Right Now?

Zacks Equity Research
UBS (UBS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

Hersha Hospitality (HT) is a stock many investors are watching right now. HT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.98, which compares to its industry's average of 16.56. Over the past year, HT's Forward P/E has been as high as 10.08 and as low as 7.27, with a median of 8.55.

HT is also sporting a PEG ratio of 1.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HT's industry has an average PEG of 3 right now. Over the last 12 months, HT's PEG has been as high as 2.54 and as low as 1.04, with a median of 1.74.

Finally, investors will want to recognize that HT has a P/CF ratio of 8.16. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.93. Over the past 52 weeks, HT's P/CF has been as high as 10.62 and as low as 3.67, with a median of 7.77.

Value investors will likely look at more than just these metrics, but the above data helps show that Hersha Hospitality is likely undervalued currently. And when considering the strength of its earnings outlook, HT sticks out at as one of the market's strongest value stocks.


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