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ARCB vs. HTLD: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Transportation - Truck sector have probably already heard of ArcBest (ARCB - Free Report) and Heartland Express (HTLD - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, ArcBest has a Zacks Rank of #1 (Strong Buy), while Heartland Express has a Zacks Rank of #3 (Hold). This means that ARCB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ARCB currently has a forward P/E ratio of 11.95, while HTLD has a forward P/E of 24.19. We also note that ARCB has a PEG ratio of 0.28. 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. HTLD currently has a PEG ratio of 1.61.

Another notable valuation metric for ARCB is its P/B ratio of 1.50. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HTLD has a P/B of 2.84.

These metrics, and several others, help ARCB earn a Value grade of A, while HTLD has been given a Value grade of C.

ARCB sticks out from HTLD in both our Zacks Rank and Style Scores models, so value investors will likely feel that ARCB is the better option right now.


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