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Are Investors Undervaluing CrossAmerica Partners (CAPL) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 CrossAmerica Partners (CAPL - Free Report) . CAPL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CAPL has a P/S ratio of 0.16. This compares to its industry's average P/S of 0.3.

Finally, investors will want to recognize that CAPL has a P/CF ratio of 5.68. 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 6.78. Over the past year, CAPL's P/CF has been as high as 8.38 and as low as 5.02, with a median of 6.52.

Investors could also keep in mind Global Partners (GLP - Free Report) , an Oil and Gas - Refining and Marketing - Master Limited Partnerships stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Additionally, Global Partners has a P/B ratio of 1.86 while its industry's price-to-book ratio sits at 3.31. For GLP, this valuation metric has been as high as 2.60, as low as 1.37, with a median of 1.89 over the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that CrossAmerica Partners and Global Partners are likely undervalued currently. And when considering the strength of its earnings outlook, CAPL and GLP sticks out as one of the market's strongest value stocks.


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