Back to top

Image: Bigstock

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

Read MoreHide Full Article

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.

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 company to watch right now is H&E Equipment (HEES - Free Report) . HEES is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Investors will also notice that HEES has a PEG ratio of 1.15. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HEES's PEG compares to its industry's average PEG of 1.55. Over the past 52 weeks, HEES's PEG has been as high as 1.26 and as low as 0.59, with a median of 0.91.

Finally, investors will want to recognize that HEES has a P/CF ratio of 3.69. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. HEES's P/CF compares to its industry's average P/CF of 7.91. HEES's P/CF has been as high as 3.73 and as low as 1.83, with a median of 2.90, all within the past year.

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.


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 >>

Published in