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Is Transportadora De Gas Ord B (TGS) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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.

Transportadora De Gas Ord B (TGS - Free Report) is a stock many investors are watching right now. TGS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another notable valuation metric for TGS is its P/B ratio of 0.75. The P/B ratio pits a stock's market value against 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 1.78. Over the past 12 months, TGS's P/B has been as high as 0.85 and as low as 0.46, with a median of 0.67.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. TGS has a P/S ratio of 1.28. This compares to its industry's average P/S of 2.07.

Finally, our model also underscores that TGS has a P/CF ratio of 3.03. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.63. TGS's P/CF has been as high as 5.80 and as low as 1.85, with a median of 2.76, all within the past year.

If you're looking for another solid Oil and Gas - Production and Pipelines value stock, take a look at Ultrapar Participacoes (UGP - Free Report) . UGP is a # 2 (Buy) stock with a Value score of A.

Shares of Ultrapar Participacoes are currently trading at a forward earnings multiple of 10.22 and a PEG ratio of 0.45 compared to its industry's P/E and PEG ratios of 14.77 and 1.99, respectively.

UGP's Forward P/E has been as high as 18.06 and as low as 8.54, with a median of 11.30. During the same time period, its PEG ratio has been as high as 0.81, as low as 0.36, with a median of 0.49.

Ultrapar Participacoes sports a P/B ratio of 1.43 as well; this compares to its industry's price-to-book ratio of 1.78. In the past 52 weeks, UGP's P/B has been as high as 2.16, as low as 1.27, with a median of 1.72.

Value investors will likely look at more than just these metrics, but the above data helps show that Transportadora De Gas Ord B and Ultrapar Participacoes are likely undervalued currently. And when considering the strength of its earnings outlook, TGS and UGP sticks out as one of the market's strongest value stocks.


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Ultrapar Participacoes S.A. (UGP) - free report >>

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