Should Value Investors Buy TravelCenters of America (TA) Stock?
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...
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
TravelCenters of America (TA) is a stock many investors are watching right now. TA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that TA has a P/B ratio of 1.06. The P/B ratio pits a stock's market value against 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 2.90. Over the past year, TA's P/B has been as high as 1.06 and as low as 0.28, with a median of 0.67.
Finally, investors should note that TA has a P/CF ratio of 4.85. 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 9.77. TA's P/CF has been as high as 4.85 and as low as 1.11, with a median of 3.28, 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 TravelCenters of America is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TA feels like a great value stock at the moment.
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