Back to top

ECHO vs. ASR: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors with an interest in Transportation - Services stocks have likely encountered both Echo Global Logistics (ECHO - Free Report) and Grupo Aeroportuario del Sureste (ASR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Echo Global Logistics is sporting a Zacks Rank of #2 (Buy), while Grupo Aeroportuario del Sureste has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ECHO has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ECHO currently has a forward P/E ratio of 14.75, while ASR has a forward P/E of 19.81. We also note that ECHO has a PEG ratio of 0.84. 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. ASR currently has a PEG ratio of 4.50.

Another notable valuation metric for ECHO is its P/B ratio of 1.88. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ASR has a P/B of 2.50.

These are just a few of the metrics contributing to ECHO's Value grade of B and ASR's Value grade of D.

ECHO is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ECHO is likely the superior value option right now.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Echo Global Logistics, Inc. (ECHO) - free report >>

Grupo Aeroportuario del Sureste, S.A. de C.V. (ASR) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in