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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is UGI (UGI - Free Report) . UGI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.04. This compares to its industry's average Forward P/E of 13.77. Over the last 12 months, UGI's Forward P/E has been as high as 10.39 and as low as 6.25, with a median of 8.15.
Investors will also notice that UGI has a PEG ratio of 1.04. 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. UGI's industry has an average PEG of 2.28 right now. UGI's PEG has been as high as 1.30 and as low as 0.78, with a median of 1.01, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. UGI has a P/S ratio of 0.67. This compares to its industry's average P/S of 1.51.
Finally, our model also underscores that UGI has a P/CF ratio of 7.12. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.61. Over the past year, UGI's P/CF has been as high as 7.64 and as low as -85.07, with a median of -15.28.
These are only a few of the key metrics included in UGI's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, UGI looks like an impressive value stock at the moment.
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Should Value Investors Buy UGI (UGI) Stock?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is UGI (UGI - Free Report) . UGI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.04. This compares to its industry's average Forward P/E of 13.77. Over the last 12 months, UGI's Forward P/E has been as high as 10.39 and as low as 6.25, with a median of 8.15.
Investors will also notice that UGI has a PEG ratio of 1.04. 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. UGI's industry has an average PEG of 2.28 right now. UGI's PEG has been as high as 1.30 and as low as 0.78, with a median of 1.01, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. UGI has a P/S ratio of 0.67. This compares to its industry's average P/S of 1.51.
Finally, our model also underscores that UGI has a P/CF ratio of 7.12. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.61. Over the past year, UGI's P/CF has been as high as 7.64 and as low as -85.07, with a median of -15.28.
These are only a few of the key metrics included in UGI's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, UGI looks like an impressive value stock at the moment.