Back to top

Should Value Investors Buy Seaspan (SSW) Stock?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company value investors might notice is Seaspan (SSW - Free Report) . SSW is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.23, while its industry has an average P/E of 17.44. Over the past 52 weeks, SSW's Forward P/E has been as high as 10.16 and as low as 5.16, with a median of 8.17.

We should also highlight that SSW has a P/B ratio of 0.48. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. SSW's current P/B looks attractive when compared to its industry's average P/B of 0.93. Within the past 52 weeks, SSW's P/B has been as high as 0.63 and as low as 0.35, with a median of 0.47.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SSW has a P/S ratio of 1.18. This compares to its industry's average P/S of 1.19.

Finally, we should also recognize that SSW has a P/CF ratio of 3.13. 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. SSW's current P/CF looks attractive when compared to its industry's average P/CF of 11.82. Within the past 12 months, SSW's P/CF has been as high as 6.75 and as low as 1.82, with a median of 2.71.

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

In-Depth Zacks Research for the Tickers Above

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

Seaspan Corporation (SSW) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in