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Should Value Investors Buy SP Plus (SP) Stock?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

SP Plus (SP - Free Report) is a stock many investors are watching right now. SP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.81, which compares to its industry's average of 15.94. Over the last 12 months, SP's Forward P/E has been as high as 17.32 and as low as 10.68, with a median of 13.73.

We also note that SP holds a PEG ratio of 1.28. 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. SP's industry has an average PEG of 1.35 right now. Over the past 52 weeks, SP's PEG has been as high as 1.88 and as low as 1.07, with a median of 1.37.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. SP has a P/S ratio of 0.51. This compares to its industry's average P/S of 0.92.

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




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