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Are Investors Undervaluing Energy Transfer (ET) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 to watch right now is Energy Transfer (ET - Free Report) . ET is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.04. This compares to its industry's average Forward P/E of 10.47. Over the past 52 weeks, ET's Forward P/E has been as high as 11.51 and as low as 4.74, with a median of 8.64.
We should also highlight that ET has a P/B ratio of 1.07. 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 solid versus its industry's average P/B of 1.76. Over the past year, ET's P/B has been as high as 1.11 and as low as 0.74, with a median of 0.97.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ET has a P/S ratio of 0.46. This compares to its industry's average P/S of 1.05.
Finally, investors will want to recognize that ET has a P/CF ratio of 4.82. 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 7.62. ET's P/CF has been as high as 5.49 and as low as 2.53, with a median of 4.19, all within the past year.
Plains All American Pipeline (PAA - Free Report) may be another strong Oil and Gas - Production Pipeline - MLB stock to add to your shortlist. PAA is a # 2 (Buy) stock with a Value grade of A.
Additionally, Plains All American Pipeline has a P/B ratio of 0.80 while its industry's price-to-book ratio sits at 1.76. For PAA, this valuation metric has been as high as 1.11, as low as 0.63, with a median of 0.75 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Energy Transfer and Plains All American Pipeline are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ET and PAA feels like a great value stock at the moment.
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Are Investors Undervaluing Energy Transfer (ET) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 to watch right now is Energy Transfer (ET - Free Report) . ET is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.04. This compares to its industry's average Forward P/E of 10.47. Over the past 52 weeks, ET's Forward P/E has been as high as 11.51 and as low as 4.74, with a median of 8.64.
We should also highlight that ET has a P/B ratio of 1.07. 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 solid versus its industry's average P/B of 1.76. Over the past year, ET's P/B has been as high as 1.11 and as low as 0.74, with a median of 0.97.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ET has a P/S ratio of 0.46. This compares to its industry's average P/S of 1.05.
Finally, investors will want to recognize that ET has a P/CF ratio of 4.82. 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 7.62. ET's P/CF has been as high as 5.49 and as low as 2.53, with a median of 4.19, all within the past year.
Plains All American Pipeline (PAA - Free Report) may be another strong Oil and Gas - Production Pipeline - MLB stock to add to your shortlist. PAA is a # 2 (Buy) stock with a Value grade of A.
Additionally, Plains All American Pipeline has a P/B ratio of 0.80 while its industry's price-to-book ratio sits at 1.76. For PAA, this valuation metric has been as high as 1.11, as low as 0.63, with a median of 0.75 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Energy Transfer and Plains All American Pipeline are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ET and PAA feels like a great value stock at the moment.