While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One stock to keep an eye on is NGL Energy Partners LP (NGL). NGL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that NGL has a P/B ratio of 0.63. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.43. NGL's P/B has been as high as 1.17 and as low as 0.50, with a median of 0.75, over the past year.
Finally, investors will want to recognize that NGL has a P/CF ratio of 2.28. 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. NGL's current P/CF looks attractive when compared to its industry's average P/CF of 6.24. NGL's P/CF has been as high as 19.71 and as low as 1.83, with a median of 9.25, all within the past year.
These are just a handful of the figures considered in NGL Energy Partners LP's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that NGL is an impressive value stock right now.
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