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Should Value Investors Buy RLJ Lodging Trust (RLJ) 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, 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 RLJ Lodging Trust (RLJ - Free Report) . RLJ is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 7.08, which compares to its industry's average of 15.30. Over the past year, RLJ's Forward P/E has been as high as 7.20 and as low as 5.46, with a median of 6.19.
Investors should also note that RLJ holds a PEG ratio of 0.83. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RLJ's PEG compares to its industry's average PEG of 2.32. Over the past 52 weeks, RLJ's PEG has been as high as 2.45 and as low as 0.74, with a median of 1.51.
We should also highlight that RLJ has a P/B ratio of 0.95. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.72. Over the past year, RLJ's P/B has been as high as 0.96 and as low as 0.71, with a median of 0.81.
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. RLJ has a P/S ratio of 1.42. This compares to its industry's average P/S of 3.86.
Finally, investors will want to recognize that RLJ has a P/CF ratio of 6.40. 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. RLJ's P/CF compares to its industry's average P/CF of 15.09. Over the past year, RLJ's P/CF has been as high as 7.16 and as low as 4.90, with a median of 5.78.
These figures are just a handful of the metrics value investors tend to look at, but they help show that RLJ Lodging Trust is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RLJ feels like a great value stock at the moment.
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Should Value Investors Buy RLJ Lodging Trust (RLJ) Stock?
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, 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 RLJ Lodging Trust (RLJ - Free Report) . RLJ is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 7.08, which compares to its industry's average of 15.30. Over the past year, RLJ's Forward P/E has been as high as 7.20 and as low as 5.46, with a median of 6.19.
Investors should also note that RLJ holds a PEG ratio of 0.83. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RLJ's PEG compares to its industry's average PEG of 2.32. Over the past 52 weeks, RLJ's PEG has been as high as 2.45 and as low as 0.74, with a median of 1.51.
We should also highlight that RLJ has a P/B ratio of 0.95. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.72. Over the past year, RLJ's P/B has been as high as 0.96 and as low as 0.71, with a median of 0.81.
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. RLJ has a P/S ratio of 1.42. This compares to its industry's average P/S of 3.86.
Finally, investors will want to recognize that RLJ has a P/CF ratio of 6.40. 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. RLJ's P/CF compares to its industry's average P/CF of 15.09. Over the past year, RLJ's P/CF has been as high as 7.16 and as low as 4.90, with a median of 5.78.
These figures are just a handful of the metrics value investors tend to look at, but they help show that RLJ Lodging Trust is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RLJ feels like a great value stock at the moment.