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Should Value Investors Buy Diana Shipping (DSX) Stock?

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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 value investors might notice is Diana Shipping (DSX - Free Report) . DSX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors should also recognize that DSX has a P/B ratio of 0.67. 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 stock's P/B looks solid versus its industry's average P/B of 1.43. Over the past year, DSX's P/B has been as high as 0.90 and as low as 0.63, with a median of 0.76.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. DSX has a P/S ratio of 1.22. This compares to its industry's average P/S of 1.36.

Finally, investors will want to recognize that DSX has a P/CF ratio of 3.18. 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 7.10. Over the past 52 weeks, DSX's P/CF has been as high as 3.54 and as low as 2.11, with a median of 2.72.

These are only a few of the key metrics included in Diana Shipping's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DSX looks like an impressive value stock at the moment.


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