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Is Transportadora De Gas Sa Ord B (TGS) Stock Undervalued Right Now?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Transportadora De Gas Sa Ord B (TGS). TGS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.23, while its industry has an average P/E of 17.61. Over the past 52 weeks, TGS's Forward P/E has been as high as 102.43 and as low as 5.44, with a median of 10.83.

Another valuation metric that we should highlight is TGS's P/B ratio of 0.67. 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 1.41. Over the past 12 months, TGS's P/B has been as high as 3.07 and as low as 0.59, with a median of 1.52.

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. TGS has a P/S ratio of 0.79. This compares to its industry's average P/S of 1.44.

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


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