Is The Geo Group (GEO) Stock Undervalued Right Now?

GEO PGRE

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is The Geo Group (GEO - Free Report) . GEO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Another notable valuation metric for GEO is its P/B ratio of 0.90. 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 2.36. GEO's P/B has been as high as 1.16 and as low as 0.66, with a median of 0.85, over the past year.

Finally, our model also underscores that GEO has a P/CF ratio of 4.32. 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. This stock's P/CF looks attractive against its industry's average P/CF of 16.10. Over the past 52 weeks, GEO's P/CF has been as high as 4.60 and as low as 2.74, with a median of 3.58.

Paramount Group (PGRE - Free Report) may be another strong REIT and Equity Trust - Other stock to add to your shortlist. PGRE is a # 2 (Buy) stock with a Value grade of A.

Shares of Paramount Group currently holds a Forward P/E ratio of 7.77, and its PEG ratio is 11.33. In comparison, its industry sports average P/E and PEG ratios of 17.91 and 2.22.

PGRE's price-to-earnings ratio has been as high as 11.85 and as low as 7.21, with a median of 9.69, while its PEG ratio has been as high as 11.62 and as low as 0.45, with a median of 9.08, all within the past year.

Paramount Group sports a P/B ratio of 0.38 as well; this compares to its industry's price-to-book ratio of 2.36. In the past 52 weeks, PGRE's P/B has been as high as 0.55, as low as 0.35, with a median of 0.44.

Value investors will likely look at more than just these metrics, but the above data helps show that The Geo Group and Paramount Group are likely undervalued currently. And when considering the strength of its earnings outlook, GEO and PGRE sticks out as one of the market's strongest value stocks.

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