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Should Value Investors Buy CAI International (CAI) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 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 stock to keep an eye on is CAI International . CAI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 5.64 right now. For comparison, its industry sports an average P/E of 11.43. Over the past 52 weeks, CAI's Forward P/E has been as high as 11.22 and as low as 4.95, with a median of 5.90.

Investors will also notice that CAI has a PEG ratio of 0.71. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CAI's industry currently sports an average PEG of 1.12. Over the past 52 weeks, CAI's PEG has been as high as 1.40 and as low as 0.62, with a median of 0.74.

Another notable valuation metric for CAI is its P/B ratio of 0.76. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.29. Over the past year, CAI's P/B has been as high as 1.26 and as low as 0.65, with a median of 0.81.

Finally, we should also recognize that CAI has a P/CF ratio of 2.08. 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. CAI's current P/CF looks attractive when compared to its industry's average P/CF of 4.16. CAI's P/CF has been as high as 4.22 and as low as 1.76, with a median of 2.34, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that CAI International is likely undervalued currently. And when considering the strength of its earnings outlook, CAI sticks out at as one of the market's strongest value stocks.

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