Are Investors Undervaluing Chatham Lodging Trust REIT (CLDT) 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 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 stock to keep an eye on is Chatham Lodging Trust REIT (CLDT). CLDT is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 6.77 right now. For comparison, its industry sports an average P/E of 16.98. Over the past year, CLDT's Forward P/E has been as high as 8.70 and as low as 5.56, with a median of 7.10.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CLDT has a P/S ratio of 2.04. This compares to its industry's average P/S of 4.01.

If you're looking for another solid REIT and Equity Trust - Other value stock, take a look at Piedmont Realty Trust, Inc. (PDM). PDM is a Zacks Rank of #2 (Buy) stock with a Value score of A.

Piedmont Realty Trust, Inc. also has a P/B ratio of 0.72 compared to its industry's price-to-book ratio of 1.99. Over the past year, its P/B ratio has been as high as 0.84, as low as 0.46, with a median of 0.63.

These are only a few of the key metrics included in Chatham Lodging Trust REIT and Piedmont Realty Trust, Inc. strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CLDT and PDM look 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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