Back to top

Should Value Investors Buy H&E Equipment (HEES) Stock?

Read MoreHide Full Article

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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is H&E Equipment (HEES - Free Report) . HEES is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Another notable valuation metric for HEES is its P/B ratio of 3.66. 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. This stock's P/B looks attractive against its industry's average P/B of 4.64. Over the past 12 months, HEES's P/B has been as high as 6.60 and as low as 2.74, with a median of 5.29.

Finally, investors should note that HEES has a P/CF ratio of 3. 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. HEES's P/CF compares to its industry's average P/CF of 7.61. Over the past year, HEES's P/CF has been as high as 4.60 and as low as 1.83, with a median of 3.64.

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

In-Depth Zacks Research for the Tickers Above

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

H&E Equipment Services, Inc. (HEES) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in