Are Investors Undervaluing NGL Energy Partners LP (NGL) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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 company to watch right now is NGL Energy Partners LP (NGL). NGL is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Investors should also recognize that NGL has a P/B ratio of 0.80. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. NGL's current P/B looks attractive when compared to its industry's average P/B of 1.48. NGL's P/B has been as high as 0.88 and as low as 0.50, with a median of 0.73, over the past year.
Finally, investors should note that NGL has a P/CF ratio of 2.88. 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. NGL's P/CF compares to its industry's average P/CF of 8.60. Within the past 12 months, NGL's P/CF has been as high as 26.16 and as low as 1.98, with a median of 8.51.
These are only a few of the key metrics included in NGL Energy Partners LP's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, NGL looks like an impressive value stock at the moment.
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