Back to top

Image: Bigstock

Are Investors Undervaluing City Office REIT (CIO) Right Now?

Read MoreHide Full Article

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is City Office REIT (CIO - Free Report) . CIO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 7.36, which compares to its industry's average of 19.70. CIO's Forward P/E has been as high as 11.52 and as low as 5.03, with a median of 7.54, all within the past year.

We should also highlight that CIO has a P/B ratio of 1.35. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.33. CIO's P/B has been as high as 1.76 and as low as 0.88, with a median of 1.27, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CIO has a P/S ratio of 2.58. This compares to its industry's average P/S of 5.23.

Finally, investors will want to recognize that CIO has a P/CF ratio of 6.23. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 18.39. Over the past 52 weeks, CIO's P/CF has been as high as 12.35 and as low as 4.05, with a median of 6.71.

These are only a few of the key metrics included in City Office REIT'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, CIO looks like an impressive value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


City Office REIT, Inc. (CIO) - free report >>

Published in