Should Value Investors Buy Plains Group (PAGP) 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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Plains Group (PAGP). PAGP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 10.62, which compares to its industry's average of 14.46. PAGP's Forward P/E has been as high as 26.95 and as low as 10.62, with a median of 13.85, all within the past year.
Finally, our model also underscores that PAGP has a P/CF ratio of 2.52. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.06. Within the past 12 months, PAGP's P/CF has been as high as 2.54 and as low as 1.85, with a median of 2.22.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Plains Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PAGP feels like a great value stock at the moment.
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Plains Group Holdings, L.P. (PAGP) : Free Stock Analysis Report
