Back to top

Image: Bigstock

Should Value Investors Buy ArcBest (ARCB) Stock?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is ArcBest (ARCB - Free Report) . ARCB is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 14.37 right now. For comparison, its industry sports an average P/E of 25.38. ARCB's Forward P/E has been as high as 19.34 and as low as 6.45, with a median of 10.58, all within the past year.

ARCB is also sporting a PEG ratio of 1.44. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ARCB's PEG compares to its industry's average PEG of 2.18. ARCB's PEG has been as high as 2.19 and as low as 0.92, with a median of 1.70, all within the past year.

Another valuation metric that we should highlight is ARCB's P/B ratio of 1.08. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. ARCB's current P/B looks attractive when compared to its industry's average P/B of 3.05. Within the past 52 weeks, ARCB's P/B has been as high as 1.13 and as low as 0.54, with a median of 0.91.

Finally, we should also recognize that ARCB has a P/CF ratio of 6.01. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.67. Over the past year, ARCB's P/CF has been as high as 6.29 and as low as 2.78, with a median of 4.29.

These are only a few of the key metrics included in ArcBest's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ARCB looks like an impressive value stock at the moment.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

ArcBest Corporation (ARCB) - free report >>

Published in