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Are Investors Undervaluing Covenant Transportation (CVTI) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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 company to watch right now is Covenant Transportation (CVTI - Free Report) . CVTI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 11.71 right now. For comparison, its industry sports an average P/E of 17.17. Over the last 12 months, CVTI's Forward P/E has been as high as 31.88 and as low as 11.71, with a median of 15.69.

We should also highlight that CVTI has a P/B ratio of 1.70. The P/B ratio pits a stock's market value against 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 2.74. CVTI's P/B has been as high as 2.24 and as low as 1.58, with a median of 1.83, over the past year.

Finally, our model also underscores that CVTI has a P/CF ratio of 3.82. 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 10.37. Over the past 52 weeks, CVTI's P/CF has been as high as 6.39 and as low as 3.66, with a median of 4.19.

These are only a few of the key metrics included in Covenant Transportation'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, CVTI looks like an impressive value stock at the moment.




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