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 Andeavor 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, Andeavor has a trailing twelve months PE ratio of 20.38, as you can see in the chart below:
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This level actually stands slightly below the market at large, as the PE for the S&P 500 stands at about 21.03. While Andeavor’s current PE level puts it above its midpoint of 11.49 over the past five years, it stands below the highs for the stock, thus highlighting scope for entry.
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Further, the stock’s PE compares favorably with the Zacks Oils - Energy sector’s trailing twelve months PE ratio, which stands at 27.96. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
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We should also point out that Andeavor has a forward PE ratio (price relative to this year’s earnings) of just 14.73, so it is fair to say that a slightly more value-oriented path may be ahead for Andeavor stock in the near term too.
P/S 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, Andeavor has a P/S ratio of about 0.54. This is considerably lower than the S&P 500 average, which comes in at 3.33 right now. This makes the stock undervalued from the P/S aspect too.
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Broad Value Outlook
In aggregate, Andeavor currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Andeavor a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Andeavor is just 0.76, a level that is lower than the industry average of 2.04. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Additionally, its P/CF ratio (another great indicator of value) comes in at 7.73, which is better than the industry average of 10.65. Clearly, ANDV is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Andeavor 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 Score and Momentum Score of A each. This gives ANDV a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been quite encouraging. The current quarter and full year have seen five and three estimates go higher, respectively in the past sixty days compared to no downward revisions.
This has had a meaningful impact on the consensus estimate, as the current quarter consensus estimate has surged 62% in the past two months, while the full year estimate has increased 13.7%.
However, this bullish trend has likely not yet been reflected in the stock, as we have just a Zacks Rank #3 (Hold), which indicates expectations of in-line performance in the near term. Nonetheless, the bullish analyst sentiment indicates that the stock’s prospects in the near term look good.
Bottom Line
Andeavor is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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Should Value Investors Consider Andeavor (ANDV) 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?
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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 Andeavor 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, Andeavor has a trailing twelve months PE ratio of 20.38, as you can see in the chart below:
This level actually stands slightly below the market at large, as the PE for the S&P 500 stands at about 21.03. While Andeavor’s current PE level puts it above its midpoint of 11.49 over the past five years, it stands below the highs for the stock, thus highlighting scope for entry.
Further, the stock’s PE compares favorably with the Zacks Oils - Energy sector’s trailing twelve months PE ratio, which stands at 27.96. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Andeavor has a forward PE ratio (price relative to this year’s earnings) of just 14.73, so it is fair to say that a slightly more value-oriented path may be ahead for Andeavor stock in the near term too.
P/S 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, Andeavor has a P/S ratio of about 0.54. This is considerably lower than the S&P 500 average, which comes in at 3.33 right now. This makes the stock undervalued from the P/S aspect too.
Broad Value Outlook
In aggregate, Andeavor currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Andeavor a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Andeavor is just 0.76, a level that is lower than the industry average of 2.04. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Additionally, its P/CF ratio (another great indicator of value) comes in at 7.73, which is better than the industry average of 10.65. Clearly, ANDV is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Andeavor 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 Score and Momentum Score of A each. This gives ANDV a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been quite encouraging. The current quarter and full year have seen five and three estimates go higher, respectively in the past sixty days compared to no downward revisions.
This has had a meaningful impact on the consensus estimate, as the current quarter consensus estimate has surged 62% in the past two months, while the full year estimate has increased 13.7%.
However, this bullish trend has likely not yet been reflected in the stock, as we have just a Zacks Rank #3 (Hold), which indicates expectations of in-line performance in the near term. Nonetheless, the bullish analyst sentiment indicates that the stock’s prospects in the near term look good.
Bottom Line
Andeavor is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>