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, 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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system’s “Value” category. Stocks with “A” grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Travel Leisure Co. (TNL) is a stock many investors are watching right now. TNL is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.65, while its industry has an average P/E of 17.67. Over the past 52 weeks, TNL’s Forward P/E has been as high as 9.08 and as low as 5.73, with a median of 7.93.
We also note that TNL holds a PEG ratio of 0.53. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company’s expected earnings growth rate. TNL’s PEG compares to its industry’s average PEG of 1.10. Within the past year, TNL’s PEG has been as high as 0.74 and as low as 0.31, with a median of 0.54.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. TNL has a P/S ratio of 1.19. This compares to its industry’s average P/S of 1.41.
Finally, investors should note that TNL has a P/CF ratio of 7.85. 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. This stock’s P/CF looks attractive against its industry’s average P/CF of 13.74. Within the past 12 months, TNL’s P/CF has been as high as 8.16 and as low as 4.94, with a median of 6.71.
These are just a handful of the figures considered in Travel Leisure Co.’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 TNL is an impressive value stock right now.
