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Is Vector Group (VGR) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Vector Group (VGR - Free Report) is a stock many investors are watching right now. VGR is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. VGR has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.42.

Finally, investors will want to recognize that VGR has a P/CF ratio of 16.39. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.71. VGR's P/CF has been as high as 21.68 and as low as 12.79, with a median of 16.06, all within the past year.

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


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