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Should Value Investors Buy Scorpio Tankers (STNG) Stock?

·2 min read

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Scorpio Tankers (STNG). STNG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Another notable valuation metric for STNG is its P/B ratio of 0.57. 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 solid versus its industry's average P/B of 0.86. Over the past 12 months, STNG's P/B has been as high as 1.17 and as low as 0.38, with a median of 0.76.

Finally, investors should note that STNG has a P/CF ratio of 5.72. 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. STNG's P/CF compares to its industry's average P/CF of 7.95. STNG's P/CF has been as high as 20.20 and as low as 3.83, with a median of 10.70, all within the past year.

These are just a handful of the figures considered in Scorpio Tankers's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that STNG is an impressive value stock right now.

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Zacks Investment Research