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Is Tutor Perini (TPC) a Great Stock for Value Investors?
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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 Tutor Perini Corporation (TPC - 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, Tutor Perini Corporationhas a trailing twelve months PE ratio of 13.6, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.8. If we focus on the long-term PE trend, Tutor Perini Corporation’s current PE level puts it above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also compares favorably with the broader sector’s trailing twelve months PE ratio, which stands at 23.4. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Tutor Perini Corporation has a forward PE ratio (price relative to this year’s earnings) of just 12.5, so it is fair to say that a slightly more value-oriented path may be ahead for Tutor Perini Corporation 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, Tutor Perini Corporation has a P/S ratio of about 0.3. This is significantly lower than the S&P 500 average, which comes in at 3.3x right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, Tutor Perini Corporation currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes Tutor Perini Corporation a solid choice for value investors.
What About the Stock Overall?
Though Tutor Perini Corporation 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 Score of F and a Momentum Score of B. This gives TPC a Zacks VGM score — or its overarching fundamental grade — of C. (You can read more about the Zacks Style Scores here >>).
Meanwhile, the company’s recent earnings estimates have been favorable. The current quarter has seen two estimates going downward, while the full year has witnessed no estimate revisions in the past sixty days.
This has had a substantial impact on the consensus estimate though as the current quarter consensus estimate has risen by 1.5% in the past two months, while the full year estimate has inched up 0.5%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
The stock has a Zacks Rank #3 (Hold) signifying probabilities of in-line performance in the near term.
Bottom Line
Tutor Perini Corporation is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (among Bottom 18% of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the broader industry has clearly underperformed the market at large, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
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While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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Is Tutor Perini (TPC) 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 Tutor Perini Corporation (TPC - 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, Tutor Perini Corporationhas a trailing twelve months PE ratio of 13.6, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.8. If we focus on the long-term PE trend, Tutor Perini Corporation’s current PE level puts it above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also compares favorably with the broader sector’s trailing twelve months PE ratio, which stands at 23.4. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Tutor Perini Corporation has a forward PE ratio (price relative to this year’s earnings) of just 12.5, so it is fair to say that a slightly more value-oriented path may be ahead for Tutor Perini Corporation 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, Tutor Perini Corporation has a P/S ratio of about 0.3. This is significantly lower than the S&P 500 average, which comes in at 3.3x right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, Tutor Perini Corporation currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes Tutor Perini Corporation a solid choice for value investors.
What About the Stock Overall?
Though Tutor Perini Corporation 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 Score of F and a Momentum Score of B. This gives TPC a Zacks VGM score — or its overarching fundamental grade — of C. (You can read more about the Zacks Style Scores here >>).
Meanwhile, the company’s recent earnings estimates have been favorable. The current quarter has seen two estimates going downward, while the full year has witnessed no estimate revisions in the past sixty days.
This has had a substantial impact on the consensus estimate though as the current quarter consensus estimate has risen by 1.5% in the past two months, while the full year estimate has inched up 0.5%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Tutor Perini Corporation Price and Consensus
Tutor Perini Corporation Price and Consensus | Tutor Perini Corporation Quote
The stock has a Zacks Rank #3 (Hold) signifying probabilities of in-line performance in the near term.
Bottom Line
Tutor Perini Corporation is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (among Bottom 18% of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the broader industry has clearly underperformed the market at large, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>