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ECHO vs. ASR: Which Stock Should Value Investors Buy Now?

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Investors interested in Transportation - Services stocks are likely familiar with Echo Global Logistics and Grupo Aeroportuario del Sureste (ASR - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Echo Global Logistics has a Zacks Rank of #2 (Buy), while Grupo Aeroportuario del Sureste has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ECHO has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ECHO currently has a forward P/E ratio of 14.49, while ASR has a forward P/E of 17.53. We also note that ECHO has a PEG ratio of 0.83. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ASR currently has a PEG ratio of 3.98.

Another notable valuation metric for ECHO is its P/B ratio of 1.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ASR has a P/B of 2.21.

Based on these metrics and many more, ECHO holds a Value grade of A, while ASR has a Value grade of C.

ECHO is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ECHO is likely the superior value option right now.


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