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Is NGL Energy Partners LP (NGL) Stock Undervalued Right Now?

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  • NGL-PB

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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.

NGL Energy Partners LP (NGL) is a stock many investors are watching right now. NGL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

We also note that NGL holds a PEG ratio of 3.52. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NGL's industry has an average PEG of 4.31 right now. Over the last 12 months, NGL's PEG has been as high as 841.97 and as low as -295.86, with a median of 7.36.

Finally, investors will want to recognize that NGL has a P/CF ratio of 4.89. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. NGL's P/CF compares to its industry's average P/CF of 9.68. NGL's P/CF has been as high as 9.16 and as low as 1.15, with a median of 3.96, all within the past year.

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


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