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ECHO or ASR: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Transportation - Services sector might want to consider either Echo Global Logistics or 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Echo Global Logistics and Grupo Aeroportuario del Sureste are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

ECHO currently has a forward P/E ratio of 12.85, while ASR has a forward P/E of 20.69. We also note that ECHO has a PEG ratio of 0.73. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ASR currently has a PEG ratio of 4.70.

Another notable valuation metric for ECHO is its P/B ratio of 1.76. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ASR has a P/B of 2.72.

These metrics, and several others, help ECHO earn a Value grade of B, while ASR has been given a Value grade of D.

ECHO has seen stronger estimate revision activity and sports more attractive valuation metrics than ASR, so it seems like value investors will conclude that ECHO is the superior option right now.


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