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Is Teekay Tankers (TNK) a Great Value Stock Right Now?

Zacks Equity Research
·3 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.

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

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 Teekay Tankers (TNK). TNK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another valuation metric that we should highlight is TNK's P/B ratio of 0.53. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 0.86. Over the past 12 months, TNK's P/B has been as high as 0.88 and as low as 0.28, with a median of 0.55.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. TNK has a P/S ratio of 0.52. This compares to its industry's average P/S of 0.64.

Finally, we should also recognize that TNK has a P/CF ratio of 2.24. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. TNK's P/CF compares to its industry's average P/CF of 7.95. TNK's P/CF has been as high as 7.28 and as low as 2.05, with a median of 3.12, all within the past year.

These are only a few of the key metrics included in Teekay Tankers'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, TNK looks like an impressive value stock at the moment.


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