Are Investors Undervaluing Renewable Energy Group (REGI) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Renewable Energy Group (REGI) is a stock many investors are watching right now. REGI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.22 right now. For comparison, its industry sports an average P/E of 18.64. Over the past 52 weeks, REGI's Forward P/E has been as high as 15.20 and as low as -7.39, with a median of 6.31.
Another valuation metric that we should highlight is REGI's P/B ratio of 1.34. 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. REGI's current P/B looks attractive when compared to its industry's average P/B of 1.99. REGI's P/B has been as high as 1.34 and as low as 0.63, with a median of 0.82, over the past year.
Finally, our model also underscores that REGI has a P/CF ratio of 4.48. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.20. Over the past year, REGI's P/CF has been as high as 18.61 and as low as -79.74, with a median of 2.68.
These are only a few of the key metrics included in Renewable Energy Group'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, REGI looks like an impressive value stock at the moment.
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