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Should Value Investors Buy Hilton Grand Vacations (HGV) Stock?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Hilton Grand Vacations (HGV - Free Report) is a stock many investors are watching right now. HGV is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.44. This compares to its industry's average Forward P/E of 24.63. Over the last 12 months, HGV's Forward P/E has been as high as 12.37 and as low as 7.81, with a median of 10.32.

Investors should also note that HGV holds a PEG ratio of 1.32. 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. HGV's PEG compares to its industry's average PEG of 2.22. HGV's PEG has been as high as 1.48 and as low as 0.42, with a median of 1.11, all within the past year.

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. HGV has a P/S ratio of 1.26. This compares to its industry's average P/S of 1.91.

Finally, we should also recognize that HGV has a P/CF ratio of 8.52. 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 19.72. Within the past 12 months, HGV's P/CF has been as high as 8.99 and as low as 6.37, with a median of 7.75.

These are just a handful of the figures considered in Hilton Grand Vacations's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that HGV is an impressive value stock right now.


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