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Is Covenant Transportation (CVTI) a Great Value Stock Right Now?

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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 company to watch right now is Covenant Transportation (CVTI - Free Report) . CVTI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.81, which compares to its industry's average of 13.57. Over the last 12 months, CVTI's Forward P/E has been as high as 31.88 and as low as 7.81, with a median of 15.05.

We should also highlight that CVTI has a P/B ratio of 1.15. The P/B ratio pits a stock's market value against 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 2.23. CVTI's P/B has been as high as 2.23 and as low as 1.15, with a median of 1.76, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CVTI has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.88.

Finally, investors should note that CVTI has a P/CF ratio of 2.52. 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. CVTI's current P/CF looks attractive when compared to its industry's average P/CF of 7.54. CVTI's P/CF has been as high as 6.37 and as low as 2.52, with a median of 3.99, all within the past year.

These are just a handful of the figures considered in Covenant Transportation's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CVTI is an impressive value stock right now.




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