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, 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company to watch right now is Hersha Hospitality (HT). HT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.63. This compares to its industry's average Forward P/E of 15.90. Over the past 52 weeks, HT's Forward P/E has been as high as 10.08 and as low as 7.32, with a median of 8.13.
We also note that HT holds a PEG ratio of 1.75. 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. HT's industry currently sports an average PEG of 2.85. Over the last 12 months, HT's PEG has been as high as 2.54 and as low as 1.04, with a median of 1.86.
Another valuation metric that we should highlight is HT's P/B ratio of 0.90. 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 2.58. Over the past year, HT's P/B has been as high as 0.90 and as low as 0.71, with a median of 0.82.
Finally, we should also recognize that HT has a P/CF ratio of 10.10. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.95. HT's P/CF has been as high as 10.11 and as low as 3.67, with a median of 4, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Hersha Hospitality is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HT feels like a great value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
