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 Oaktree Capital Group, LLC 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, Oaktree Capital has a trailing twelve months PE ratio of 12.92, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 19.97. If we focus on the stock’s long-term PE trend, the current level puts Oaktree Capital’s current PE ratio above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also compares favorably with the Zacks classified Financial - Investment Management industry’s trailing twelve months PE ratio, which stands at 13.39. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Oaktree Capital has a forward PE ratio (price relative to this year’s earnings) of just 12.28, so it is fair to say that a slightly more value-oriented path may be ahead for Oaktree Capital stock in the near term too.
P/S 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, Oaktree Capital has a P/S ratio of about 2.44. This is a bit lower than the S&P 500 average, which comes in at 3.19 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, OAK 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, Oaktree Capital currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Oaktree Capital a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Oaktree Capital is just 0.96, a level that is lower than the industry average of 1.45. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, OAK is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Oaktree Capital 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 ‘A’ and a Momentum score of ‘A’. This gives OAK a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty encouraging. The current quarter has seen five estimates going higher in the past sixty days compared to none lower, while the full year estimate has seen six upward and no downward movements in the same time period.
This has had a significant impact on the consensus estimate though as the current quarter consensus estimate has grown by 117% in the past two months, and the full year estimate has increased by 25%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Oaktree Capital Group, LLC Price and Consensus
Oaktree Capital Group, LLC Price and Consensus | Oaktree Capital Group, LLC Quote
Despite having a bullish trend, Oaktree Capitalsports a Zacks Rank #3 (Hold). This indicates that analysts have some apprehensions about the stock in the immediate future. Thus, we are looking for in-line performance from the company in the near term.
Bottom Line
Oaktree Capital is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 40% out of more than 250 industries) further strengthens its growth potential.
So, despite a Zacks Rank #3, we believe that bullish analyst sentiment and favorable industry factors make this value stock 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 Oaktree Capital Group (OAK) 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 Oaktree Capital Group, LLC 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, Oaktree Capital has a trailing twelve months PE ratio of 12.92, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 19.97. If we focus on the stock’s long-term PE trend, the current level puts Oaktree Capital’s current PE ratio above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also compares favorably with the Zacks classified Financial - Investment Management industry’s trailing twelve months PE ratio, which stands at 13.39. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Oaktree Capital has a forward PE ratio (price relative to this year’s earnings) of just 12.28, so it is fair to say that a slightly more value-oriented path may be ahead for Oaktree Capital stock in the near term too.
P/S 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, Oaktree Capital has a P/S ratio of about 2.44. This is a bit lower than the S&P 500 average, which comes in at 3.19 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, OAK 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, Oaktree Capital currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Oaktree Capital a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Oaktree Capital is just 0.96, a level that is lower than the industry average of 1.45. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, OAK is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Oaktree Capital 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 ‘A’ and a Momentum score of ‘A’. This gives OAK a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty encouraging. The current quarter has seen five estimates going higher in the past sixty days compared to none lower, while the full year estimate has seen six upward and no downward movements in the same time period.
This has had a significant impact on the consensus estimate though as the current quarter consensus estimate has grown by 117% in the past two months, and the full year estimate has increased by 25%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Oaktree Capital Group, LLC Price and Consensus
Oaktree Capital Group, LLC Price and Consensus | Oaktree Capital Group, LLC Quote
Despite having a bullish trend, Oaktree Capitalsports a Zacks Rank #3 (Hold). This indicates that analysts have some apprehensions about the stock in the immediate future. Thus, we are looking for in-line performance from the company in the near term.
Bottom Line
Oaktree Capital is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 40% out of more than 250 industries) further strengthens its growth potential.
So, despite a Zacks Rank #3, we believe that bullish analyst sentiment and favorable industry factors make this value stock 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 >>