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Is Sterling Construction (STRL) a Great Value Stock Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Sterling Construction (STRL - Free Report) . STRL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 7.90 right now. For comparison, its industry sports an average P/E of 13.39. Over the last 12 months, STRL's Forward P/E has been as high as 12.37 and as low as 7.86, with a median of 10.27.

Investors should also note that STRL holds a PEG ratio of 0.77. 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. STRL's PEG compares to its industry's average PEG of 1.78. Over the last 12 months, STRL's PEG has been as high as 1.11 and as low as 0.73, with a median of 0.94.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. STRL has a P/S ratio of 0.4. This compares to its industry's average P/S of 0.42.

Value investors will likely look at more than just these metrics, but the above data helps show that Sterling Construction is likely undervalued currently. And when considering the strength of its earnings outlook, STRL sticks out at as one of the market's strongest value stocks.


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