Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Total S.A., Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Total S.A. has a trailing twelve months PE ratio of 13.21. This level compares pretty favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 20.22.
If we focus on the long-term trend of the stock, the current level puts Total S.A.’s current PE near its highs over the past five years, suggesting that the stock is somewhat overvalued compared to its own historical levels.
Further, the stock’s PE also compares considerably favorably with the Zacks classified Oil and Gas - Integrated - International industry’s trailing twelve months PE ratio, which stands at 25.75. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Total S.A. has a forward PE ratio (price relative to this year’s earnings) of 11.74 – which is lower than the current figure. So it is fair to say that a slightly more value-oriented path may be ahead for Total S.A. stock in the near term too.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Total S.A. has a P/S ratio of about 0.91. This compares somewhat similarly with the Zacks categorized Oil and Gas - Integrated - International industry’s average, which comes in at 0.89 right now.
TOT is actually in the higher zone of its trading range in the time period per the P/S metric, which suggests that the company’s stock price has already appreciated to some degree, relative to its sales.
Broad Value Outlook
In aggregate, Total S.A. currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Total S.A. a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Total S.A. is just 1.47, a level that is lower than the industry average of 1.72. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, TOT is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Total S.A. might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘D’. This gives TOT a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score can increase your odds of success. All things considered, Total S.A. seems to have pretty striking prospects.
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen no revisions over the past thirty days, but the full year estimate has seen two downward revisions versus none in the opposite direction, in the same time period.
This has had a small impact on the consensus estimate though as the current quarter consensus estimate has remained constant in the past month, while the full year estimate has decreased 1%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
TotalFinaElf, S.A. Price and Consensus
This somewhat negative trend is why the stock has just a Zacks Rank #3 (Hold) despite strong value metrics and why we are looking for in-line performance from the company in the near term.
Bottom Line
Total S.A. is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (Bottom 23% out of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the Zacks Oil and Gas - Integrated - International industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Image: Bigstock
Should Value Investors Opt for Total S.A. (TOT) Stock?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Total S.A., Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Total S.A. has a trailing twelve months PE ratio of 13.21. This level compares pretty favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 20.22.
If we focus on the long-term trend of the stock, the current level puts Total S.A.’s current PE near its highs over the past five years, suggesting that the stock is somewhat overvalued compared to its own historical levels.
Further, the stock’s PE also compares considerably favorably with the Zacks classified Oil and Gas - Integrated - International industry’s trailing twelve months PE ratio, which stands at 25.75. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Total S.A. has a forward PE ratio (price relative to this year’s earnings) of 11.74 – which is lower than the current figure. So it is fair to say that a slightly more value-oriented path may be ahead for Total S.A. stock in the near term too.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Total S.A. has a P/S ratio of about 0.91. This compares somewhat similarly with the Zacks categorized Oil and Gas - Integrated - International industry’s average, which comes in at 0.89 right now.
TOT is actually in the higher zone of its trading range in the time period per the P/S metric, which suggests that the company’s stock price has already appreciated to some degree, relative to its sales.
Broad Value Outlook
In aggregate, Total S.A. currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Total S.A. a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Total S.A. is just 1.47, a level that is lower than the industry average of 1.72. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, TOT is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Total S.A. might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘D’. This gives TOT a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score can increase your odds of success. All things considered, Total S.A. seems to have pretty striking prospects.
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen no revisions over the past thirty days, but the full year estimate has seen two downward revisions versus none in the opposite direction, in the same time period.
This has had a small impact on the consensus estimate though as the current quarter consensus estimate has remained constant in the past month, while the full year estimate has decreased 1%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
TotalFinaElf, S.A. Price and Consensus
TotalFinaElf, S.A. Price and Consensus | TotalFinaElf, S.A. Quote
This somewhat negative trend is why the stock has just a Zacks Rank #3 (Hold) despite strong value metrics and why we are looking for in-line performance from the company in the near term.
Bottom Line
Total S.A. is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (Bottom 23% out of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the Zacks Oil and Gas - Integrated - International industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>