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Is SSE plc (SSEZY) a Great Stock for Value Investors?
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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 SSE plc (SSEZY - Free Report) 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, SSE plc has a trailing twelve months PE ratio of 12.35, 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 stands at about 20.56. If we focus on the long-term PE trend, SSE plc’s current PE level puts it slightly below its midpoint of 12.79 over the past five years. Moreover, the current level stands below the highs for the stock, suggesting that it could be a solid entry point.
Further, the stock’s PE also compares favorably with the Zacks classified Computer & Technology sector’s trailing twelve months PE ratio, which stands at 22.50. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that SSE plc’s forward PE is roughly same as its trailing twelve months value, so we might say that the forward earnings estimates are incorporated in the company’s share price as of now. We define forward PE as current price relative to the Zacks Consensus Estimate for the current fiscal year.
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, SSE plc has a P/S ratio of about 0.51. This is way lower than the S&P 500 average, which comes in at 3.19 right now. This makes the stock undervalued from this aspect as well.
Broad Value Outlook
In aggregate, SSE plc 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 SSE plc a solid choice for value investors.
What About the Stock Overall?
Though SSE plc 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 and a Momentum score of ‘A’, each. This gives SSEZY a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Further, the company’s recent earnings estimates have been encouraging as the full year estimate has seen one upward revision with no downward revisions in the past sixty days. This has had a positive impact on the consensus estimate, as the full year estimate has inched higher by 2.6%, in the past two months. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Given this bullish trend, the stock flaunts a Zacks Rank #2 (Buy), which indicates why we are looking for outperformance from the company in the near term.
Bottom Line
SSE plc is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, this Zacks Rank #2 company belongs to the Zacks categorized Electronics – Power Generation industry that is ranked among the Top 5% out of all Zacks industries. This hints at favorable broader factors for the company.
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
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Is SSE plc (SSEZY) a Great Stock for Value Investors?
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?
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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 SSE plc (SSEZY - Free Report) 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, SSE plc has a trailing twelve months PE ratio of 12.35, 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 stands at about 20.56. If we focus on the long-term PE trend, SSE plc’s current PE level puts it slightly below its midpoint of 12.79 over the past five years. Moreover, the current level stands below the highs for the stock, suggesting that it could be a solid entry point.
Further, the stock’s PE also compares favorably with the Zacks classified Computer & Technology sector’s trailing twelve months PE ratio, which stands at 22.50. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that SSE plc’s forward PE is roughly same as its trailing twelve months value, so we might say that the forward earnings estimates are incorporated in the company’s share price as of now. We define forward PE as current price relative to the Zacks Consensus Estimate for the current fiscal year.
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, SSE plc has a P/S ratio of about 0.51. This is way lower than the S&P 500 average, which comes in at 3.19 right now. This makes the stock undervalued from this aspect as well.
Broad Value Outlook
In aggregate, SSE plc 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 SSE plc a solid choice for value investors.
What About the Stock Overall?
Though SSE plc 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 and a Momentum score of ‘A’, each. This gives SSEZY a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Further, the company’s recent earnings estimates have been encouraging as the full year estimate has seen one upward revision with no downward revisions in the past sixty days. This has had a positive impact on the consensus estimate, as the full year estimate has inched higher by 2.6%, in the past two months. You can see the consensus estimate trend and recent price action for the stock in the chart below:
SSE PLC Price and Consensus
SSE PLC Price and Consensus | SSE PLC Quote
Given this bullish trend, the stock flaunts a Zacks Rank #2 (Buy), which indicates why we are looking for outperformance from the company in the near term.
Bottom Line
SSE plc is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, this Zacks Rank #2 company belongs to the Zacks categorized Electronics – Power Generation industry that is ranked among the Top 5% out of all Zacks industries. This hints at favorable broader factors for the company.
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>