Are Investors Undervaluing Tutor Perini (TPC) Right Now?

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 value investors might notice is Tutor Perini (TPC). TPC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 14.92 right now. For comparison, its industry sports an average P/E of 26.05. Over the last 12 months, TPC's Forward P/E has been as high as 21.71 and as low as -18.85, with a median of 16.26.

Investors should also recognize that TPC has a P/B ratio of 2.78. 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 solid versus its industry's average P/B of 6.61. Over the past 12 months, TPC's P/B has been as high as 2.81 and as low as 0.87, with a median of 1.16.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TPC has a P/S ratio of 0.67. This compares to its industry's average P/S of 1.23.

These are only a few of the key metrics included in Tutor Perini's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TPC looks like an impressive value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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