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Are Investors Undervaluing Plains Group (PAGP) Right Now?

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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.

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.

Plains Group (PAGP - Free Report) is a stock many investors are watching right now. PAGP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 10.86. This compares to its industry's average Forward P/E of 14.20. Over the past year, PAGP's Forward P/E has been as high as 26.95 and as low as 10.26, with a median of 13.64.

Finally, investors should note that PAGP has a P/CF ratio of 2.61. 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. PAGP's P/CF compares to its industry's average P/CF of 8.92. PAGP's P/CF has been as high as 2.61 and as low as 1.85, with a median of 2.22, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Plains Group is likely undervalued currently. And when considering the strength of its earnings outlook, PAGP sticks out at as one of the market's strongest value stocks.


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