Back to top

Image: Bigstock

Should Value Investors Buy Covenant Logistics (CVLG) 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.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Covenant Logistics (CVLG - Free Report) is a stock many investors are watching right now. CVLG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.55, while its industry has an average P/E of 25.24. Over the last 12 months, CVLG's Forward P/E has been as high as 31.02 and as low as 5.66, with a median of 12.81.

Finally, we should also recognize that CVLG has a P/CF ratio of 5.41. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.67. Over the past year, CVLG's P/CF has been as high as 6.78 and as low as 1.48, with a median of 2.76.

These are just a handful of the figures considered in Covenant Logistics's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CVLG is an impressive value stock right now.

In-Depth Zacks Research for the Tickers Above

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

Covenant Transportation Group, Inc. (CVLG) - free report >>

Published in