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Should Value Investors Buy CrossAmerica Partners (CAPL) Stock?

Zacks Equity Research
·3-min read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is CrossAmerica Partners (CAPL). CAPL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

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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. CAPL has a P/S ratio of 0.15. This compares to its industry's average P/S of 0.22.

Finally, our model also underscores that CAPL has a P/CF ratio of 5.65. 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 5.67. CAPL's P/CF has been as high as 9.37 and as low as 5.65, with a median of 7.49, all within the past year.

Global Partners (GLP) may be another strong Oil and Gas - Refining and Marketing - Master Limited Partnerships stock to add to your shortlist. GLP is a # 1 (Strong Buy) stock with a Value grade of A.

Additionally, Global Partners has a P/B ratio of 1.60 while its industry's price-to-book ratio sits at 2.61. For GLP, this valuation metric has been as high as 2.60, as low as 1.47, with a median of 2.03 over the past year.

These are just a handful of the figures considered in CrossAmerica Partners and Global Partners's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CAPL and GLP is an impressive value stock right now.


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CrossAmerica Partners LP (CAPL) : Free Stock Analysis Report
 
Global Partners LP (GLP) : Free Stock Analysis Report
 
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Zacks Investment Research