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Should Value Investors Buy Pebblebrook Hotel Trust (PEB) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Pebblebrook Hotel Trust (PEB - Free Report) . PEB is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7.82, while its industry has an average P/E of 15.67. Over the past year, PEB's Forward P/E has been as high as 8.94 and as low as 4.77, with a median of 7.42.

PEB is also sporting a PEG ratio of 1.49. 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. PEB's PEG compares to its industry's average PEG of 1.96. Over the past 52 weeks, PEB's PEG has been as high as 2.03 and as low as 0.50, with a median of 0.58.

Finally, investors will want to recognize that PEB has a P/CF ratio of 6.38. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. PEB's P/CF compares to its industry's average P/CF of 15.40. Within the past 12 months, PEB's P/CF has been as high as 13.87 and as low as 3.92, with a median of 5.94.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Pebblebrook Hotel Trust is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PEB feels like a great value stock at the moment.


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