Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put CorEnergy Infrastructure Trust, Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, CorEnergy has a trailing twelve months PE ratio of 9.02. This level compares pretty favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 19.97.
If we focus on the long-term trend of the stock the current level puts CorEnergy’s current PE among its median over the observed period, which stands at 9.16. Also, the current level is much below the highs experienced for the stock, over the said term.
Further, the stock’s PE also compares favorably with the Zacks classified REIT and Equity Trust – Other industry’s trailing twelve months PE ratio, which stands at 15.33. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that CorEnergy has a forward PE ratio (price relative to this year’s earnings) of just 7.96, so it is fair to say that a slightly more value-oriented path may be ahead for CorEnergy stock in the near term too.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, CorEnergy has a P/S ratio of about 4.79. This is lower than the Zacks categorized REIT and Equity Trust – Other industry average, which comes in at 7.06 right now.
If anything, CORR is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, CorEnergy currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes CorEnergy an apt choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for CorEnergy is just 2.65, a level that is lower than the industry average of 2.86. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Additionally, its P/B ratio (used to compare a stock's market value to its book value) stands at 1.14, lower than the industry average of 1.65. Clearly, CORR is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though CorEnergy might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘C’ and a Momentum score of ‘F’. This gives CORR a Zacks VGM score—or its overarching fundamental grade—of ‘C’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s earnings estimates have been trending downwards lately. The current quarter has seen one estimate go lower in the past thirty days compared to none higher, while the full year estimate has seen one downward revision and no upward revision in the same time period.
This has had a meaningful impact on the consensus estimate as the current quarter consensus estimate has moved lower by 1.7% over the past month, while the full year estimate has declined 2.2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
CorEnergy Infrastructure Trust, Inc. Price and Consensus
This negative trend is why the stock has just a Zacks Rank #3 (Hold) despite strong value metrics and why we are looking for in-line performance from the company in the near term.
Bottom Line
CorEnergy is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (Bottom 39% out of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past year, the Zacks REIT and Equity Trust – Other industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells". Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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Will CorEnergy (CORR) Prove to be a Suitable Value Pick?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put CorEnergy Infrastructure Trust, Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, CorEnergy has a trailing twelve months PE ratio of 9.02. This level compares pretty favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 19.97.
If we focus on the long-term trend of the stock the current level puts CorEnergy’s current PE among its median over the observed period, which stands at 9.16. Also, the current level is much below the highs experienced for the stock, over the said term.
Further, the stock’s PE also compares favorably with the Zacks classified REIT and Equity Trust – Other industry’s trailing twelve months PE ratio, which stands at 15.33. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that CorEnergy has a forward PE ratio (price relative to this year’s earnings) of just 7.96, so it is fair to say that a slightly more value-oriented path may be ahead for CorEnergy stock in the near term too.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, CorEnergy has a P/S ratio of about 4.79. This is lower than the Zacks categorized REIT and Equity Trust – Other industry average, which comes in at 7.06 right now.
If anything, CORR is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, CorEnergy currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes CorEnergy an apt choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for CorEnergy is just 2.65, a level that is lower than the industry average of 2.86. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Additionally, its P/B ratio (used to compare a stock's market value to its book value) stands at 1.14, lower than the industry average of 1.65. Clearly, CORR is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though CorEnergy might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘C’ and a Momentum score of ‘F’. This gives CORR a Zacks VGM score—or its overarching fundamental grade—of ‘C’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s earnings estimates have been trending downwards lately. The current quarter has seen one estimate go lower in the past thirty days compared to none higher, while the full year estimate has seen one downward revision and no upward revision in the same time period.
This has had a meaningful impact on the consensus estimate as the current quarter consensus estimate has moved lower by 1.7% over the past month, while the full year estimate has declined 2.2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
CorEnergy Infrastructure Trust, Inc. Price and Consensus
CorEnergy Infrastructure Trust, Inc. Price and Consensus | CorEnergy Infrastructure Trust, Inc. Quote
This negative trend is why the stock has just a Zacks Rank #3 (Hold) despite strong value metrics and why we are looking for in-line performance from the company in the near term.
Bottom Line
CorEnergy is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (Bottom 39% out of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past year, the Zacks REIT and Equity Trust – Other industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells". Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>