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Are Investors Undervaluing Atlantic Power (AT) Right Now?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Atlantic Power (AT - Free Report) is a stock many investors are watching right now. AT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 4.50 right now. For comparison, its industry sports an average P/E of 13.03. Over the last 12 months, AT's Forward P/E has been as high as 4.70 and as low as -30.13, with a median of -15.33.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. AT has a P/S ratio of 0.76. This compares to its industry's average P/S of 1.87.

Finally, investors will want to recognize that AT has a P/CF ratio of 3.36. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. AT's current P/CF looks attractive when compared to its industry's average P/CF of 6.66. Over the past 52 weeks, AT's P/CF has been as high as 9.13 and as low as 2.43, with a median of 4.83.

These are only a few of the key metrics included in Atlantic Power'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, AT looks like an impressive value stock at the moment.




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