Back to top

Image: Bigstock

Is Trinity Industries (TRN) Stock Undervalued Right Now?

Read MoreHide Full Article

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.

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.

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 stock to keep an eye on is Trinity Industries (TRN - Free Report) . TRN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also recognize that TRN has a P/B ratio of 0.90. 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 attractive against its industry's average P/B of 1.37. Over the past year, TRN's P/B has been as high as 1.32 and as low as 0.87, with a median of 1.12.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TRN has a P/S ratio of 0.92. This compares to its industry's average P/S of 1.25.

Finally, investors will want to recognize that TRN has a P/CF ratio of 4.25. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 4.49. Over the past 52 weeks, TRN's P/CF has been as high as 10.95 and as low as 4.09, with a median of 5.35.

These are only a few of the key metrics included in Trinity Industries'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, TRN looks like an impressive value stock at the moment.


See More Zacks Research for These Tickers


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


Trinity Industries, Inc. (TRN) - free report >>

Published in