Should Value Investors Buy Golar LNG Partners LP (GMLP) Stock?
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.
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.
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.
Golar LNG Partners LP (GMLP) is a stock many investors are watching right now. GMLP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 3.98, while its industry has an average P/E of 10.78. Over the last 12 months, GMLP's Forward P/E has been as high as 7.52 and as low as 1.92, with a median of 3.31.
Investors should also note that GMLP holds a PEG ratio of 0.50. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GMLP's PEG compares to its industry's average PEG of 1.35. Over the last 12 months, GMLP's PEG has been as high as 0.94 and as low as 0.24, with a median of 0.41.
Another notable valuation metric for GMLP is its P/B ratio of 0.50. 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 stock's P/B looks attractive against its industry's average P/B of 1.33. GMLP's P/B has been as high as 0.93 and as low as 0.19, with a median of 0.33, over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Golar LNG Partners LP is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GMLP feels like a great value stock at the moment.
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