Should Value Investors Buy NGL Energy Partners (NGL) Stock?
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.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 to watch right now is NGL Energy Partners (NGL). NGL is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Another valuation metric that we should highlight is NGL's P/B ratio of 1.41. 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. NGL's current P/B looks attractive when compared to its industry's average P/B of 3.72. NGL's P/B has been as high as 1.41 and as low as 0.33, with a median of 1.11, over the past year.
Finally, our model also underscores that NGL has a P/CF ratio of 1.81. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 6.69. Over the past year, NGL's P/CF has been as high as 1.81 and as low as 0.45, with a median of 1.44.
Sunoco (SUN) may be another strong Oil and Gas - Refining and Marketing - Master Limited Partnerships stock to add to your shortlist. SUN is a # 1 (Strong Buy) stock with a Value grade of A.
Furthermore, Sunoco holds a P/B ratio of 4.81 and its industry's price-to-book ratio is 3.72. SUN's P/B has been as high as 5.15, as low as 4, with a median of 4.52 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that NGL Energy Partners and Sunoco are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NGL and SUN feels like a great value stock at the moment.
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NGL Energy Partners LP (NGL) : Free Stock Analysis Report
Sunoco LP (SUN) : Free Stock Analysis Report
