Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Seaspan Corporation stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Seaspan has a trailing twelve months PE ratio of 6.16, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.35. If we focus on the stock’s long-term PE trend, the current level puts Seaspan’s current PE ratio below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Transportation – Shipping industry’s trailing twelve months PE ratio, which stands at 19.11. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Seaspan has a forward PE ratio (price relative to this year’s earnings) of just 10.50. So on the ground of the forward earnings estimates, we might say that the company’s share price is likely to appreciate in the near future.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Seaspan has a P/S ratio of about 0.94. This is far lower than the S&P 500 average, which comes in at 3.14 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, SSW is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Seaspan currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Seaspan a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Seaspan is just 0.72, a level that is lower than the industry average of 1.56. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, SSW is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Seaspan might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘F’ and a Momentum score of ‘D’. This gives SSW a Zacks VGM score—or its overarching fundamental grade—of ‘C’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been witnessing an unfavorable trend over past sixty days. Both the current quarter and the current year estimates have seen one downward and no upward movement over the same time frame.
Resultantly, the consensus estimate has dropped significantly in the past two moths, clearly evidenced from a 14.3% decrease in the current quarter estimate and a 2.6% fall in the full year estimate. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Seaspan Corporation Price and Consensus
Seaspan Corporation Price and Consensus | Seaspan Corporation Quote
This negative trend is why the stock has just a Zacks Rank #3 (Hold) despite strong value metrics and why we are looking for in-line performance from the company in the near term
Bottom Line
Seaspan is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (Bottom 38%( of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the Zacks Transportation - Shipping industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
Image: Bigstock
Is Seaspan (SSW) a Great Stock for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Seaspan Corporation stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Seaspan has a trailing twelve months PE ratio of 6.16, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.35. If we focus on the stock’s long-term PE trend, the current level puts Seaspan’s current PE ratio below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Transportation – Shipping industry’s trailing twelve months PE ratio, which stands at 19.11. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Seaspan has a forward PE ratio (price relative to this year’s earnings) of just 10.50. So on the ground of the forward earnings estimates, we might say that the company’s share price is likely to appreciate in the near future.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Seaspan has a P/S ratio of about 0.94. This is far lower than the S&P 500 average, which comes in at 3.14 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, SSW is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Seaspan currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Seaspan a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the PEG ratio for Seaspan is just 0.72, a level that is lower than the industry average of 1.56. The PEG ratio is a modified PE ratio that takes into account the stock’s earnings growth rate. Clearly, SSW is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Seaspan might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘F’ and a Momentum score of ‘D’. This gives SSW a Zacks VGM score—or its overarching fundamental grade—of ‘C’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been witnessing an unfavorable trend over past sixty days. Both the current quarter and the current year estimates have seen one downward and no upward movement over the same time frame.
Resultantly, the consensus estimate has dropped significantly in the past two moths, clearly evidenced from a 14.3% decrease in the current quarter estimate and a 2.6% fall in the full year estimate. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Seaspan Corporation Price and Consensus
Seaspan Corporation Price and Consensus | Seaspan Corporation Quote
This negative trend is why the stock has just a Zacks Rank #3 (Hold) despite strong value metrics and why we are looking for in-line performance from the company in the near term
Bottom Line
Seaspan is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish industry rank (Bottom 38%( of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the Zacks Transportation - Shipping industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>