Are Investors Undervaluing TravelCenters of America (TA) Right Now?
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…
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 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 company to watch right now is TravelCenters of America (TA - Free Report) . TA is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
The stock is trading with a P/E ratio of 9.51, which compares to its industry's average of 21.33. Over the past year, TA's Forward P/E has been as high as 23.81 and as low as 9.23, with a median of 11.99.Finally, investors should note that TA has a P/CF ratio of 2.79. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook.
TA's current P/CF looks attractive when compared to its industry's average P/CF of 10.71. Within the past 12 months, TA's P/CF has been as high as 5 and as low as 2.38, with a median of 3.48.Value investors will likely look at more than just these metrics, but the above data helps show that TravelCenters of America is likely undervalued currently. And when considering the strength of its earnings outlook, TA sticks out at as one of the market's strongest value stocks.