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Is Covenant Logistics (CVLG) Stock Undervalued 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, 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.

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.

One company value investors might notice is Covenant Logistics (CVLG - Free Report) . CVLG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 7.71. This compares to its industry's average Forward P/E of 22.23. CVLG's Forward P/E has been as high as 11.55 and as low as 6.18, with a median of 8.79, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CVLG has a P/S ratio of 0.47. This compares to its industry's average P/S of 1.38.

Finally, investors should note that CVLG has a P/CF ratio of 7.18. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.87. CVLG's P/CF has been as high as 15.81 and as low as 4.31, with a median of 8.69, all within the past year.

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


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