Is Summit Midstream Partners, LP (SMLP) a Great Value Stock Right Now?
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Summit Midstream Partners, LP (SMLP) is a stock many investors are watching right now. SMLP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.97 right now. For comparison, its industry sports an average P/E of 13.75. Over the past year, SMLP's Forward P/E has been as high as 40.10 and as low as -58.16, with a median of 17.89.
Another notable valuation metric for SMLP is its P/B ratio of 0.78. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.72. SMLP's P/B has been as high as 1.38 and as low as 0.75, with a median of 1.10, over the past year.
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. SMLP has a P/S ratio of 1.41. This compares to its industry's average P/S of 1.62.
Finally, investors should note that SMLP has a P/CF ratio of 4.64. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.83. Over the past 52 weeks, SMLP's P/CF has been as high as 12.65 and as low as 4.49, with a median of 6.74.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Summit Midstream Partners, LP is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SMLP feels like a great value stock at the moment.
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