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Are Investors Undervaluing Vector Group (VGR) Right Now?

Zacks Equity Research
·2 min read

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.

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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Vector Group (VGR) is a stock many investors are watching right now. VGR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. VGR has a P/S ratio of 0.96. This compares to its industry's average P/S of 1.88.

Finally, investors will want to recognize that VGR has a P/CF ratio of 20.14. 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 26.33. Over the past year, VGR's P/CF has been as high as 21.95 and as low as 12.79, with a median of 17.64.

Value investors will likely look at more than just these metrics, but the above data helps show that Vector Group is likely undervalued currently. And when considering the strength of its earnings outlook, VGR sticks out at as one of the market's strongest value stocks.


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