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Should Value Investors Buy These Transportation Stocks?
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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.
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 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.
One company to watch right now is Golden Ocean Group (GOGL - Free Report) . GOGL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
We should also highlight that GOGL has a P/B ratio of 0.60. Investors use the P/B ratio to look at a stock's market value versus 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 0.95. Over the past year, GOGL's P/B has been as high as 0.96 and as low as 0.48, with a median of 0.73.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GOGL has a P/S ratio of 1.18. This compares to its industry's average P/S of 1.35.
Finally, our model also underscores that GOGL has a P/CF ratio of 3.38. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 5.85. Over the past 52 weeks, GOGL's P/CF has been as high as 295.23 and as low as -96.07, with a median of 6.18.
Star Bulk Carriers (SBLK - Free Report) may be another strong Transportation - Shipping stock to add to your shortlist. SBLK is a # 2 (Buy) stock with a Value grade of A.
Star Bulk Carriers sports a P/B ratio of 1.12 as well; this compares to its industry's price-to-book ratio of 0.95. In the past 52 weeks, SBLK's P/B has been as high as 1.47, as low as 0.49, with a median of 1.12.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Golden Ocean Group and Star Bulk Carriers are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GOGL and SBLK feels like a great value stock at the moment.
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Should Value Investors Buy These Transportation Stocks?
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.
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 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.
One company to watch right now is Golden Ocean Group (GOGL - Free Report) . GOGL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
We should also highlight that GOGL has a P/B ratio of 0.60. Investors use the P/B ratio to look at a stock's market value versus 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 0.95. Over the past year, GOGL's P/B has been as high as 0.96 and as low as 0.48, with a median of 0.73.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GOGL has a P/S ratio of 1.18. This compares to its industry's average P/S of 1.35.
Finally, our model also underscores that GOGL has a P/CF ratio of 3.38. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 5.85. Over the past 52 weeks, GOGL's P/CF has been as high as 295.23 and as low as -96.07, with a median of 6.18.
Star Bulk Carriers (SBLK - Free Report) may be another strong Transportation - Shipping stock to add to your shortlist. SBLK is a # 2 (Buy) stock with a Value grade of A.
Star Bulk Carriers sports a P/B ratio of 1.12 as well; this compares to its industry's price-to-book ratio of 0.95. In the past 52 weeks, SBLK's P/B has been as high as 1.47, as low as 0.49, with a median of 1.12.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Golden Ocean Group and Star Bulk Carriers are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GOGL and SBLK feels like a great value stock at the moment.