Are Investors Undervaluing Pebblebrook Hotel Trust (PEB) 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 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 Pebblebrook Hotel Trust (PEB). PEB is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 10.30, which compares to its industry's average of 14.97. Over the past 52 weeks, PEB's Forward P/E has been as high as 11.11 and as low as 7.19, with a median of 8.58.
Investors should also recognize that PEB has a P/B ratio of 0.64. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.70. Over the past year, PEB's P/B has been as high as 0.70 and as low as 0.48, with a median of 0.58.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PEB has a P/S ratio of 1.35. This compares to its industry's average P/S of 3.91.
Finally, we should also recognize that PEB has a P/CF ratio of 10.61. 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. PEB's P/CF compares to its industry's average P/CF of 14.60. Over the past year, PEB's P/CF has been as high as 12.84 and as low as 6.66, with a median of 8.64.
RLJ Lodging Trust (RLJ) may be another strong REIT and Equity Trust - Other stock to add to your shortlist. RLJ is a # 2 (Buy) stock with a Value grade of A.
RLJ Lodging Trust is currently trading with a Forward P/E ratio of 6.89 while its PEG ratio sits at 0.81. Both of the company's metrics compare favorably to its industry's average P/E of 14.97 and average PEG ratio of 2.25.
Over the past year, RLJ's P/E has been as high as 7.20, as low as 5.46, with a median of 6.19; its PEG ratio has been as high as 2.45, as low as 0.74, with a median of 0.61 during the same time period.
RLJ Lodging Trust sports a P/B ratio of 0.90 as well; this compares to its industry's price-to-book ratio of 1.70. In the past 52 weeks, RLJ's P/B has been as high as 0.98, as low as 0.71, with a median of 0.81.
Value investors will likely look at more than just these metrics, but the above data helps show that Pebblebrook Hotel Trust and RLJ Lodging Trust are likely undervalued currently. And when considering the strength of its earnings outlook, PEB and RLJ sticks out as one of the market's strongest value stocks.
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Pebblebrook Hotel Trust (PEB) : Free Stock Analysis Report
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