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Are Investors Undervaluing H&E Equipment (HEES) Right Now?

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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.

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.

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 to watch right now is H&E Equipment (HEES - Free Report) . HEES is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also recognize that HEES has a P/B ratio of 3.97. 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 4.01. HEES's P/B has been as high as 5.88 and as low as 2.74, with a median of 3.75, over the past year.

Finally, investors will want to recognize that HEES has a P/CF ratio of 3.20. 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. HEES's current P/CF looks attractive when compared to its industry's average P/CF of 6.96. Within the past 12 months, HEES's P/CF has been as high as 4.04 and as low as 1.83, with a median of 3.01.

These are only a few of the key metrics included in H&E Equipment'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, HEES looks like an impressive value stock at the moment.


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