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Should Value Investors Buy Tanger Factory Outlet (SKT) 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 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.

Tanger Factory Outlet (SKT - Free Report) is a stock many investors are watching right now. SKT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.90, while its industry has an average P/E of 15.20. Over the past 52 weeks, SKT's Forward P/E has been as high as 10.08 and as low as 6.29, with a median of 8.51.

We should also highlight that SKT has a P/B ratio of 2.76. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.35. SKT's P/B has been as high as 4.36 and as low as 2.52, with a median of 3.75, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SKT has a P/S ratio of 2.77. This compares to its industry's average P/S of 6.86.

Finally, we should also recognize that SKT has a P/CF ratio of 6.78. 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. SKT's current P/CF looks attractive when compared to its industry's average P/CF of 7.62. SKT's P/CF has been as high as 12.47 and as low as 6.18, with a median of 8.72, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Tanger Factory Outlet is likely undervalued currently. And when considering the strength of its earnings outlook, SKT sticks out at as one of the market's strongest value stocks.


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