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Is Tutor Perini (TPC) a Profitable Pick for Value Investors?
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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 Tutor Perini Corporation (TPC - Free Report) 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, Tutor Perini has a trailing twelve months PE ratio of 10, as you can see in the chart below:
This level actually compares quite favorably with the market at large, as the PE for the S&P 500 stands at about 18.13. Also, if we focus on the long-term PE trend, Tutor Perini’s current PE level puts it below its midpoint of 12.43 over the past five years.
Further, the stock’s PE compares favorably with the Construction Market’s trailing twelve months PE ratio, which stands at 14.25. This indicates that the stock is undervalued right now, compared to its peers.
Also, Tutor Perini has a forward PE ratio (price relative to this year’s earnings) of 8.94, which is lower than the current level. So, it is fair to say that a slightly more value-oriented path may be ahead for Tutor Perini stock.
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, Tutor Perini has a P/S ratio of just 0.22. This is quite lower than the S&P 500 average, which comes in at 3.3 right now. Also, as we can see in the chart below, this stands below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, Tutor Perini currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Tutor Perini a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Tutor Perini is just 0.9, a level that is lower than the industry average of 1.3x. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, TPC is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Tutor Perini 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 of B and a Momentum Score of F. This gives TPC 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 mixed at best. The current quarter has seen one upward and one downward revision in the past sixty days, while the full year estimate has seen one upward versus no downward revisions in the same time period.
This has had a mixed impact on the consensus estimate as the current quarter consensus estimate has plunged 61.5% in the past two months, while the full year estimate has climbed 1.4%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Despite this mixed trend, the stock has a Zacks Rank #2 (Buy) and it is the reason why we are looking for outperformance from the company in the near term.
Bottom Line
Tutor Perini is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Despite a sluggish industry rank (among Bottom 23% of more than 250 industries), a Zacks Rank #2, instils investors’ confidence in the stock.
However, over the past two years, the broader industry has clearly underperformed the market at large, as you can see below:
We believe, despite an unsatisfactory past industry performance, a good Zacks rank signal that the stock is likely to benefit from favorable broader factors in the immediate future. Add to this robust value metrics, and we believe that we have a strong value contender in TPC.
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Is Tutor Perini (TPC) a Profitable Pick for Value Investors?
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 Tutor Perini Corporation (TPC - Free Report) 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, Tutor Perini has a trailing twelve months PE ratio of 10, as you can see in the chart below:
This level actually compares quite favorably with the market at large, as the PE for the S&P 500 stands at about 18.13. Also, if we focus on the long-term PE trend, Tutor Perini’s current PE level puts it below its midpoint of 12.43 over the past five years.
Further, the stock’s PE compares favorably with the Construction Market’s trailing twelve months PE ratio, which stands at 14.25. This indicates that the stock is undervalued right now, compared to its peers.
Also, Tutor Perini has a forward PE ratio (price relative to this year’s earnings) of 8.94, which is lower than the current level. So, it is fair to say that a slightly more value-oriented path may be ahead for Tutor Perini stock.
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, Tutor Perini has a P/S ratio of just 0.22. This is quite lower than the S&P 500 average, which comes in at 3.3 right now. Also, as we can see in the chart below, this stands below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, Tutor Perini currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Tutor Perini a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Tutor Perini is just 0.9, a level that is lower than the industry average of 1.3x. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, TPC is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Tutor Perini 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 of B and a Momentum Score of F. This gives TPC 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 mixed at best. The current quarter has seen one upward and one downward revision in the past sixty days, while the full year estimate has seen one upward versus no downward revisions in the same time period.
This has had a mixed impact on the consensus estimate as the current quarter consensus estimate has plunged 61.5% in the past two months, while the full year estimate has climbed 1.4%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Tutor Perini Corporation Price and Consensus
Tutor Perini Corporation Price and Consensus | Tutor Perini Corporation Quote
Despite this mixed trend, the stock has a Zacks Rank #2 (Buy) and it is the reason why we are looking for outperformance from the company in the near term.
Bottom Line
Tutor Perini is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Despite a sluggish industry rank (among Bottom 23% of more than 250 industries), a Zacks Rank #2, instils investors’ confidence in the stock.
However, over the past two years, the broader industry has clearly underperformed the market at large, as you can see below:
We believe, despite an unsatisfactory past industry performance, a good Zacks rank signal that the stock is likely to benefit from favorable broader factors in the immediate future. Add to this robust value metrics, and we believe that we have a strong value contender in TPC.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>