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Are Investors Undervaluing Uniti Group (UNIT) Right Now?

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Zacks Equity Research
·2 min read
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Uniti Group (UNIT). UNIT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 6.21 right now. For comparison, its industry sports an average P/E of 17.89. Over the last 12 months, UNIT's Forward P/E has been as high as 7.10 and as low as 2.48, with a median of 4.19.

Investors will also notice that UNIT has a PEG ratio of 1.58. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. UNIT's industry has an average PEG of 2.86 right now. Within the past year, UNIT's PEG has been as high as 1.73 and as low as 0.96, with a median of 1.20.

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. UNIT has a P/S ratio of 2.18. This compares to its industry's average P/S of 4.55.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Uniti Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UNIT feels like a great value stock at the moment.


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