Should Value Investors Buy KNOT Offshore Partners (KNOP) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One company value investors might notice is KNOT Offshore Partners (KNOP). KNOP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that KNOP has a P/B ratio of 0.40. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. KNOP's current P/B looks attractive when compared to its industry's average P/B of 1.12. Over the past year, KNOP's P/B has been as high as 0.93 and as low as 0.26, with a median of 0.36.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KNOP has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.1.
Finally, we should also recognize that KNOP has a P/CF ratio of 2.25. 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. KNOP's current P/CF looks attractive when compared to its industry's average P/CF of 3.63. Over the past 52 weeks, KNOP's P/CF has been as high as 3.53 and as low as 1.02, with a median of 1.87.
Teekay Tankers (TNK) may be another strong Transportation - Shipping stock to add to your shortlist. TNK is a # 2 (Buy) stock with a Value grade of A.
Shares of Teekay Tankers are currently trading at a forward earnings multiple of 4.68 and a PEG ratio of 1.56 compared to its industry's P/E and PEG ratios of 6.24 and 0.35, respectively.
TNK's price-to-earnings ratio has been as high as 7.47 and as low as 1.98, with a median of 4.05, while its PEG ratio has been as high as 2.49 and as low as 0.66, with a median of 1.35, all within the past year.
Teekay Tankers also has a P/B ratio of 1.09 compared to its industry's price-to-book ratio of 1.12. Over the past year, its P/B ratio has been as high as 1.51, as low as 0.85, with a median of 1.08.
These are only a few of the key metrics included in KNOT Offshore Partners and Teekay Tankers strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, KNOP and TNK look like an impressive value stock at the moment.
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KNOT Offshore Partners LP (KNOP) : Free Stock Analysis Report
Teekay Tankers Ltd. (TNK) : Free Stock Analysis Report
