Back to top

Image: Bigstock

Are Investors Undervaluing P.A.M. Transportation (PTSI) Right Now?

Read MoreHide Full Article

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 value investors might notice is P.A.M. Transportation (PTSI - Free Report) . PTSI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.27. This compares to its industry's average Forward P/E of 23.93. Over the last 12 months, PTSI's Forward P/E has been as high as 17.42 and as low as 4.70, with a median of 11.89.

We should also highlight that PTSI has a P/B ratio of 1.92. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. PTSI's current P/B looks attractive when compared to its industry's average P/B of 3.05. Within the past 52 weeks, PTSI's P/B has been as high as 2.49 and as low as 0.95, with a median of 1.63.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PTSI has a P/S ratio of 0.55. This compares to its industry's average P/S of 1.16.

Finally, we should also recognize that PTSI has a P/CF ratio of 5.70. 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. PTSI's P/CF compares to its industry's average P/CF of 14.67. Within the past 12 months, PTSI's P/CF has been as high as 6.21 and as low as 2.01, with a median of 4.22.

These figures are just a handful of the metrics value investors tend to look at, but they help show that P.A.M. Transportation is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PTSI feels like a great value stock at the moment.

In-Depth Zacks Research for the Tickers Above

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

P.A.M. Transportation Services, Inc. (PTSI) - free report >>

Published in