Investors interested in Transportation - Truck stocks are likely familiar with ArcBest (ARCB - Free Report) and Landstar System (LSTR - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, both ArcBest and Landstar System are sporting a Zacks Rank of # 1 (Strong Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ARCB currently has a forward P/E ratio of 15.13, while LSTR has a forward P/E of 19.04. We also note that ARCB has a PEG ratio of 0.38. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LSTR currently has a PEG ratio of 1.41.
Another notable valuation metric for ARCB is its P/B ratio of 1.83. 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. By comparison, LSTR has a P/B of 7.16.
These metrics, and several others, help ARCB earn a Value grade of A, while LSTR has been given a Value grade of C.
Both ARCB and LSTR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ARCB is the superior value option right now.