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KNX vs. LSTR: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Transportation - Truck stocks have likely encountered both Knight-Swift Transportation Holdings (KNX - Free Report) and Landstar System (LSTR - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Knight-Swift Transportation Holdings is sporting a Zacks Rank of #2 (Buy), while Landstar System has a Zacks Rank of #3 (Hold). This means that KNX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

KNX currently has a forward P/E ratio of 15.12, while LSTR has a forward P/E of 18.63. We also note that KNX has a PEG ratio of 1.01. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LSTR currently has a PEG ratio of 1.55.

Another notable valuation metric for KNX is its P/B ratio of 1.12. 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. By comparison, LSTR has a P/B of 6.20.

Based on these metrics and many more, KNX holds a Value grade of A, while LSTR has a Value grade of C.

KNX has seen stronger estimate revision activity and sports more attractive valuation metrics than LSTR, so it seems like value investors will conclude that KNX is the superior option right now.


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Knight-Swift Transportation Holdings Inc. (KNX) - free report >>

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