Back to top

Image: Bigstock

Are Investors Undervaluing Office Properties (OPI) Right Now?

Read MoreHide Full Article

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.

One company value investors might notice is Office Properties (OPI - Free Report) . OPI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. OPI has a P/S ratio of 2.45. This compares to its industry's average P/S of 6.41.

Finally, investors will want to recognize that OPI has a P/CF ratio of 5.83. 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. OPI's current P/CF looks attractive when compared to its industry's average P/CF of 18.80. OPI's P/CF has been as high as 10.38 and as low as 3.24, with a median of 5.83, 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 Office Properties is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OPI feels like a great value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Office Properties Income Trust (OPI) - free report >>

Published in