We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Triumph Group (TGI) a Great Stock for Value Investors?
Read MoreHide Full Article
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Triumph Group, Inc. (TGI - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Triumph Group has a trailing twelve months PE ratio of 5.47, as you can see in the chart below:
This level is significantly favorable with the market at large, as the PE for the S&P 500 compares in at about 20.11. If we focus on the stock’s long-term PE trend, the current level puts Triumph Group’s current PE ratio much below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Aerospace sector’s trailing twelve months PE ratio, which stands at 20.52. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Triumph Group has a forward PE ratio (price relative to this year’s earnings) of 5.37, so it is fair to say that a slightly more value-oriented path may be ahead for Triumph Group stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Triumph Group has a P/S ratio of about 0.34. This is significantly lower than the S&P 500 average, which comes in at 3.01 right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.
If anything, Triumph Group is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Triumph Group currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes Triumph Group a solid choice for value investors.
What About the Stock Overall?
Though Triumph Group might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘B’ and a Momentum score of ‘F’. This gives Triumph Group a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent consensus estimate trend has been somewhat disappointing. While the consensus estimate for the current quarter dipped 1.6% in the past two months, the full year estimate has declined 2.2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
This slightly bearish trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Triumph Group is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, a sluggish industry rank (bottom 33% out of more than 250 industries) and a Zacks Rank #3, makes it hard to get too excited about this company overall. In fact, over the past three years, the Zacks Aerospace-Defense Equipment sector has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for broader factors to turn favorable for this name first, but once that happens, this stock could be a compelling pick.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017? Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Triumph Group (TGI) a Great Stock for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Triumph Group, Inc. (TGI - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Triumph Group has a trailing twelve months PE ratio of 5.47, as you can see in the chart below:
This level is significantly favorable with the market at large, as the PE for the S&P 500 compares in at about 20.11. If we focus on the stock’s long-term PE trend, the current level puts Triumph Group’s current PE ratio much below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Aerospace sector’s trailing twelve months PE ratio, which stands at 20.52. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Triumph Group has a forward PE ratio (price relative to this year’s earnings) of 5.37, so it is fair to say that a slightly more value-oriented path may be ahead for Triumph Group stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Triumph Group has a P/S ratio of about 0.34. This is significantly lower than the S&P 500 average, which comes in at 3.01 right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.
If anything, Triumph Group is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Triumph Group currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes Triumph Group a solid choice for value investors.
What About the Stock Overall?
Though Triumph Group might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘B’ and a Momentum score of ‘F’. This gives Triumph Group a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent consensus estimate trend has been somewhat disappointing. While the consensus estimate for the current quarter dipped 1.6% in the past two months, the full year estimate has declined 2.2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Triumph Group, Inc. Price and Consensus
Triumph Group, Inc. Price and Consensus | Triumph Group, Inc. Quote
This slightly bearish trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Triumph Group is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, a sluggish industry rank (bottom 33% out of more than 250 industries) and a Zacks Rank #3, makes it hard to get too excited about this company overall. In fact, over the past three years, the Zacks Aerospace-Defense Equipment sector has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for broader factors to turn favorable for this name first, but once that happens, this stock could be a compelling pick.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017? Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>