While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 to watch right now is CAI International (CAI - Free Report) . CAI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 5.19 right now. For comparison, its industry sports an average P/E of 9.83. 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 5.85.
We also note that CAI holds a PEG ratio of 0.65. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CAI's PEG compares to its industry's average PEG of 0.96. Within the past year, CAI's PEG has been as high as 1.40 and as low as 0.62, with a median of 0.73.
We should also highlight that CAI has a P/B ratio of 0.70. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. CAI's current P/B looks attractive when compared to its industry's average P/B of 1.11. CAI's P/B has been as high as 1.21 and as low as 0.65, with a median of 0.80, over the past year.
Finally, investors will want to recognize that CAI has a P/CF ratio of 1.92. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. CAI's current P/CF looks attractive when compared to its industry's average P/CF of 3.58. CAI's P/CF has been as high as 4.04 and as low as 1.76, with a median of 2.30, all within the past year.
These are just a handful of the figures considered in CAI International'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 CAI is an impressive value stock right now.