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Are Investors Undervaluing Phillips 66 (PSX) 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Phillips 66 (PSX - Free Report) . PSX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors will also notice that PSX has a PEG ratio of 0.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PSX's PEG compares to its industry's average PEG of 0.48. Over the past 52 weeks, PSX's PEG has been as high as 1.06 and as low as 0.39, with a median of 0.63.
Another notable valuation metric for PSX is its P/B ratio of 1.53. 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. PSX's current P/B looks attractive when compared to its industry's average P/B of 2.08. Over the past year, PSX's P/B has been as high as 2.40 and as low as 1.15, with a median of 1.69.
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. PSX has a P/S ratio of 0.31. This compares to its industry's average P/S of 0.32.
Finally, investors should note that PSX has a P/CF ratio of 4.31. 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 stock's P/CF looks attractive against its industry's average P/CF of 5.23. PSX's P/CF has been as high as 33.65 and as low as 3.23, with a median of 9.42, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Phillips 66 is likely undervalued currently. And when considering the strength of its earnings outlook, PSX sticks out at as one of the market's strongest value stocks.
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Are Investors Undervaluing Phillips 66 (PSX) 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Phillips 66 (PSX - Free Report) . PSX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors will also notice that PSX has a PEG ratio of 0.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PSX's PEG compares to its industry's average PEG of 0.48. Over the past 52 weeks, PSX's PEG has been as high as 1.06 and as low as 0.39, with a median of 0.63.
Another notable valuation metric for PSX is its P/B ratio of 1.53. 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. PSX's current P/B looks attractive when compared to its industry's average P/B of 2.08. Over the past year, PSX's P/B has been as high as 2.40 and as low as 1.15, with a median of 1.69.
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. PSX has a P/S ratio of 0.31. This compares to its industry's average P/S of 0.32.
Finally, investors should note that PSX has a P/CF ratio of 4.31. 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 stock's P/CF looks attractive against its industry's average P/CF of 5.23. PSX's P/CF has been as high as 33.65 and as low as 3.23, with a median of 9.42, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Phillips 66 is likely undervalued currently. And when considering the strength of its earnings outlook, PSX sticks out at as one of the market's strongest value stocks.