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Should Value Investors Buy These Transportation Stocks?
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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Eagle Bulk Shipping is a stock many investors are watching right now. EGLE is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 3.17, while its industry has an average P/E of 4.05. Over the past 52 weeks, EGLE's Forward P/E has been as high as 59.43 and as low as -53.54, with a median of 4.48.
Another notable valuation metric for EGLE is its P/B ratio of 0.90. 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 company's current P/B looks solid when compared to its industry's average P/B of 0.96. EGLE's P/B has been as high as 1.42 and as low as 0.43, with a median of 0.97, over the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. EGLE has a P/S ratio of 1.16. This compares to its industry's average P/S of 1.38.
Finally, investors will want to recognize that EGLE has a P/CF ratio of 3.81. 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. EGLE's P/CF compares to its industry's average P/CF of 5.96. Over the past year, EGLE's P/CF has been as high as 13.49 and as low as 3.46, with a median of 7.98.
Investors could also keep in mind Star Bulk Carriers (SBLK - Free Report) , an Transportation - Shipping stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Star Bulk Carriers also has a P/B ratio of 1.26 compared to its industry's price-to-book ratio of 0.96. Over the past year, its P/B ratio has been as high as 1.47, as low as 0.48, with a median of 1.12.
Value investors will likely look at more than just these metrics, but the above data helps show that Eagle Bulk Shipping and Star Bulk Carriers are likely undervalued currently. And when considering the strength of its earnings outlook, EGLE and SBLK sticks out as one of the market's strongest value stocks.
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Should Value Investors Buy These Transportation Stocks?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Eagle Bulk Shipping is a stock many investors are watching right now. EGLE is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 3.17, while its industry has an average P/E of 4.05. Over the past 52 weeks, EGLE's Forward P/E has been as high as 59.43 and as low as -53.54, with a median of 4.48.
Another notable valuation metric for EGLE is its P/B ratio of 0.90. 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 company's current P/B looks solid when compared to its industry's average P/B of 0.96. EGLE's P/B has been as high as 1.42 and as low as 0.43, with a median of 0.97, over the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. EGLE has a P/S ratio of 1.16. This compares to its industry's average P/S of 1.38.
Finally, investors will want to recognize that EGLE has a P/CF ratio of 3.81. 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. EGLE's P/CF compares to its industry's average P/CF of 5.96. Over the past year, EGLE's P/CF has been as high as 13.49 and as low as 3.46, with a median of 7.98.
Investors could also keep in mind Star Bulk Carriers (SBLK - Free Report) , an Transportation - Shipping stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Star Bulk Carriers also has a P/B ratio of 1.26 compared to its industry's price-to-book ratio of 0.96. Over the past year, its P/B ratio has been as high as 1.47, as low as 0.48, with a median of 1.12.
Value investors will likely look at more than just these metrics, but the above data helps show that Eagle Bulk Shipping and Star Bulk Carriers are likely undervalued currently. And when considering the strength of its earnings outlook, EGLE and SBLK sticks out as one of the market's strongest value stocks.