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Are Investors Undervaluing Capital Product Partners L.P. (CPLP) Right Now?

Zacks Equity Research

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 stock to keep an eye on is Capital Product Partners L.P. (CPLP). CPLP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.75. This compares to its industry's average Forward P/E of 15.44. Over the last 12 months, CPLP's Forward P/E has been as high as 15.49 and as low as 9.63, with a median of 11.03.

Another valuation metric that we should highlight is CPLP's P/B ratio of 0.33. 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 0.85. Over the past 12 months, CPLP's P/B has been as high as 0.52 and as low as 0.30, with a median of 0.43.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CPLP has a P/S ratio of 1.02. This compares to its industry's average P/S of 1.04.

Finally, our model also underscores that CPLP has a P/CF ratio of 2.76. 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 9.49. Over the past year, CPLP's P/CF has been as high as 3.89 and as low as 2.55, with a median of 3.28.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Capital Product Partners L.P. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CPLP feels like a great value stock at the moment.


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