Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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.
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 stock to keep an eye on is Echo Global Logistics . ECHO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 21.37, which compares to its industry's average of 28.52. Over the past year, ECHO's Forward P/E has been as high as 25.44 and as low as 12.28, with a median of 15.07.
We also note that ECHO holds a PEG ratio of 1.22. 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. ECHO's PEG compares to its industry's average PEG of 2.42. Over the past 52 weeks, ECHO's PEG has been as high as 1.41 and as low as 0.70, with a median of 0.86.
Another valuation metric that we should highlight is ECHO's P/B ratio of 1.90. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.94. Within the past 52 weeks, ECHO's P/B has been as high as 1.97 and as low as 1.05, with a median of 1.49.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ECHO has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.9.
Finally, we should also recognize that ECHO has a P/CF ratio of 16.37. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ECHO's current P/CF looks attractive when compared to its industry's average P/CF of 20.68. Over the past 52 weeks, ECHO's P/CF has been as high as 17.04 and as low as 7.39, with a median of 10.12.
Value investors will likely look at more than just these metrics, but the above data helps show that Echo Global Logistics is likely undervalued currently. And when considering the strength of its earnings outlook, ECHO sticks out at as one of the market's strongest value stocks.
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Are Investors Undervaluing Echo Global Logistics (ECHO) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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.
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 stock to keep an eye on is Echo Global Logistics . ECHO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 21.37, which compares to its industry's average of 28.52. Over the past year, ECHO's Forward P/E has been as high as 25.44 and as low as 12.28, with a median of 15.07.
We also note that ECHO holds a PEG ratio of 1.22. 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. ECHO's PEG compares to its industry's average PEG of 2.42. Over the past 52 weeks, ECHO's PEG has been as high as 1.41 and as low as 0.70, with a median of 0.86.
Another valuation metric that we should highlight is ECHO's P/B ratio of 1.90. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.94. Within the past 52 weeks, ECHO's P/B has been as high as 1.97 and as low as 1.05, with a median of 1.49.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ECHO has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.9.
Finally, we should also recognize that ECHO has a P/CF ratio of 16.37. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ECHO's current P/CF looks attractive when compared to its industry's average P/CF of 20.68. Over the past 52 weeks, ECHO's P/CF has been as high as 17.04 and as low as 7.39, with a median of 10.12.
Value investors will likely look at more than just these metrics, but the above data helps show that Echo Global Logistics is likely undervalued currently. And when considering the strength of its earnings outlook, ECHO sticks out at as one of the market's strongest value stocks.