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Are Investors Undervaluing Delek Logistics Partners, L.P. (DKL) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Delek Logistics Partners, L.P. (DKL). DKL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 8.85, while its industry has an average P/E of 12.03. Over the last 12 months, DKL's Forward P/E has been as high as 11.19 and as low as 8.37, with a median of 10.11.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DKL has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.66.

Finally, investors will want to recognize that DKL has a P/CF ratio of 6.26. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. DKL's current P/CF looks attractive when compared to its industry's average P/CF of 7.97. Over the past 52 weeks, DKL's P/CF has been as high as 7.83 and as low as 5.56, with a median of 6.24.

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


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