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

·3 min read

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 stock to keep an eye on is Hersha Hospitality Trust (HT). HT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.49, while its industry has an average P/E of 18.35. HT's Forward P/E has been as high as 19.89 and as low as -48.88, with a median of 9.87, all within the past year.

Finally, investors will want to recognize that HT has a P/CF ratio of 9.43. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. HT's current P/CF looks attractive when compared to its industry's average P/CF of 16.70. Over the past year, HT's P/CF has been as high as 35.42 and as low as -727.68, with a median of 9.91.

Investors could also keep in mind Paramount Group (PGRE), an REIT and Equity Trust - Other stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Shares of Paramount Group are currently trading at a forward earnings multiple of 8.03 and a PEG ratio of 11.33 compared to its industry's P/E and PEG ratios of 18.35 and 2.26, respectively.

Over the last 12 months, PGRE's P/E has been as high as 11.85, as low as 7.21, with a median of 9.76, and 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 0.39 while its industry's price-to-book ratio sits at 2.31. 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 just a handful of the figures considered in Hersha Hospitality Trust and Paramount Group'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 HT and PGRE is an impressive value stock right now.


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