Apple Hospitality (APLE) Stock: A Value Investor’s Take

Apple Hospitality REIT: A Compelling Value Play for Investors

A new analysis suggests Apple Hospitality REIT (APLE) presents a significant opportunity for value investors, currently trading at metrics substantially below its industry peers. The assessment, based on the proven Zacks Rank system and a comprehensive review of valuation indicators, points to potential undervaluation despite a strong earnings outlook.

According to a company release, Zacks focuses on earnings estimates and revisions to identify winning stocks, but also acknowledges the diverse perspectives of its readership, continually evaluating trends in value, growth, and momentum.Value investing, utilizing basic analysis and customary metrics, remains a popular strategy for identifying overlooked opportunities.

Did you know? – Value investing gained prominence with Benjamin Graham and David dodd’s 1934 book,”Security Analysis.” Their approach emphasizes buying stocks trading below their intrinsic value, offering a margin of safety.

Zacks Style Scores Highlight undervalued Stocks

Zacks has developed the Style Scores system to pinpoint stocks with specific characteristics. An “A” grade in the “Value” category, when combined with a high Zacks Rank, signals a notably strong value proposition. Currently, APLE boasts a Zacks Rank #2 (Buy) and an A for Value, making it a stock to watch closely.

Pro tip: – Zacks Rank is a proprietary system that rates stocks from #1 (strong Buy) to #5 (Strong Sell) based on earnings estimate revisions. A #2 (Buy) suggests positive momentum.

Key Valuation metrics Point to Undervaluation

Several key ratios indicate that Apple Hospitality REIT may be trading below its intrinsic value. The stock’s P/E ratio currently stands at 8.28, substantially lower than the industry average of 15.73. Over the past 12 months, the Forward P/E has fluctuated between 6.69 and 9.93, with a median of 8.77.

Another crucial metric is the P/B ratio, which compares a stock’s market capitalization to its book value (total assets minus total liabilities). APLE’s P/B ratio of 0.91 is favorable when compared to the industry average of 1.79. The stock’s P/B has ranged from 0.79 to 1.19 over the last year, with a median of 1.04.

Analyzing Price-to-sales and Cash flow

Value investors also frequently examine the P/S ratio, calculated by dividing a stock’s price by its revenue. APLE’s P/S ratio is 2.05, considerably lower than the industry average of 3.89. One analyst noted that sales figures are less susceptible to manipulation, making the P/S ratio a reliable performance indicator.

the model highlights APLE’s P/CF ratio of 7.86, which considers operating cash flow. This metric helps identify stocks undervalued based on their cash-generating potential. APLE’s P/CF is attractive compared to the industry average of 15.14, having ranged from 6.68 to 9.97 over the past year, with a median of 8.65.

Reader question: – Do you believe a low P/CF ratio always indicates a good investment? What other factors should investors consider?

Why: Apple Hospitality REIT (APLE) is being identified as a potentially undervalued stock.
Who: Zacks, a stock rating and research firm, is the source of the analysis. Value investors are the target audience.
What: The analysis indicates APLE is trading below its intrinsic value based on several key valuation metrics (P/E, P/B, P/S, P/CF) and receives a favorable Zacks rank and Style Score.