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Are Investors Undervaluing Pebblebrook Hotel Trust (PEB) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One company value investors might notice is Pebblebrook Hotel Trust (PEB - Free Report) . PEB is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.82. This compares to its industry's average Forward P/E of 15.22. Over the last 12 months, PEB's Forward P/E has been as high as 8.94 and as low as 4.77, with a median of 7.42.

Investors should also note that PEB holds a PEG ratio of 1.49. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PEB's PEG compares to its industry's average PEG of 1.94. Within the past year, PEB's PEG has been as high as 2.03 and as low as 0.50, with a median of 0.58.

Finally, investors should note that PEB has a P/CF ratio of 6.38. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.86. PEB's P/CF has been as high as 13.87 and as low as 3.92, with a median of 5.94, all within the past year.

Park Hotels & Resorts (PK - Free Report) may be another strong REIT and Equity Trust - Other stock to add to your shortlist. PK is a Zacks Rank of #2 (Buy) stock with a Value grade of A.

Shares of Park Hotels & Resorts currently hold a Forward P/E ratio of 5.89, and its PEG ratio is 1.37. In comparison, its industry sports average P/E and PEG ratios of 15.22 and 1.94.

Over the past year, PK's P/E has been as high as 7.11, as low as 4.38, with a median of 5.77; its PEG ratio has been as high as 6.29, as low as 0.61, with a median of 1.28 during the same time period.

Park Hotels & Resorts also has a P/B ratio of 0.71 compared to its industry's price-to-book ratio of 1.77. Over the past year, its P/B ratio has been as high as 0.88, as low as 0.52, with a median of 0.70.

Value investors will likely look at more than just these metrics, but the above data helps show that Pebblebrook Hotel Trust and Park Hotels & Resorts are likely undervalued currently. And when considering the strength of its earnings outlook, PEB and PK sticks out as one of the market's strongest value stocks.


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