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Should Value Investors Buy Hilton Grand Vacations (HGV) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Hilton Grand Vacations (HGV - Free Report) is a stock many investors are watching right now. HGV is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.74. This compares to its industry's average Forward P/E of 20.74. Over the last 12 months, HGV's Forward P/E has been as high as 12.37 and as low as 7.81, with a median of 10.27.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. HGV has a P/S ratio of 0.98. This compares to its industry's average P/S of 1.93.

Finally, investors will want to recognize that HGV has a P/CF ratio of 8.43. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.37. Over the past year, HGV's P/CF has been as high as 9.62 and as low as 6.37, with a median of 8.16.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Hilton Grand Vacations is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HGV feels like a great value stock at the moment.


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