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Are Investors Undervaluing Norwegian Cruise Line (NCLH) 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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Norwegian Cruise Line (NCLH - Free Report) . NCLH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.11, while its industry has an average P/E of 17.35. Over the last 12 months, NCLH's Forward P/E has been as high as 26.42 and as low as 8.48, with a median of 14.09.

We also note that NCLH holds a PEG ratio of 0.21. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NCLH's industry has an average PEG of 0.57 right now. NCLH's PEG has been as high as 0.33 and as low as 0.21, with a median of 0.29, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. NCLH has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.08.

Finally, our model also underscores that NCLH has a P/CF ratio of 5.56. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.64. NCLH's P/CF has been as high as 16.32 and as low as -1,471.18, with a median of 6.59, all within the past year.

These are only a few of the key metrics included in Norwegian Cruise Line'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, NCLH looks like an impressive value stock at the moment.

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