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Are Investors Undervaluing Westlake Chemical Partners (WLKP) Right Now?

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·2 min read
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Westlake Chemical Partners (WLKP). WLKP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.75. This compares to its industry's average Forward P/E of 29.18. Over the past 52 weeks, WLKP's Forward P/E has been as high as 15.68 and as low as 5, with a median of 10.48.

We also note that WLKP holds a PEG ratio of 3.28. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WLKP's industry has an average PEG of 4.65 right now. Within the past year, WLKP's PEG has been as high as 5.03 and as low as 0.89, with a median of 3.04.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. WLKP has a P/S ratio of 0.76. This compares to its industry's average P/S of 1.93.

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


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