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Should Value Investors Buy Westlake Chemical Partners (WLKP) Stock?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.

One company value investors might notice is Westlake Chemical Partners (WLKP). WLKP is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.08. This compares to its industry's average Forward P/E of 18.56. Over the past 52 weeks, WLKP's Forward P/E has been as high as 15.56 and as low as 10.18, with a median of 12.32.

We also note that WLKP holds a PEG ratio of 0.69. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WLKP's industry has an average PEG of 1.79 right now. Over the past 52 weeks, WLKP's PEG has been as high as 5.35 and as low as 0.63, with a median of 3.61.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. WLKP has a P/S ratio of 0.6. This compares to its industry's average P/S of 1.64.

These are only a few of the key metrics included in Westlake Chemical Partners's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, WLKP looks like an impressive value stock at the moment.

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