Back to top

Image: Bigstock

Should Value Investors Buy Gatx (GATX) Stock?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Gatx (GATX - Free Report) . GATX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

We also note that GATX holds a PEG ratio of 1.06. 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. GATX's PEG compares to its industry's average PEG of 1.20. Within the past year, GATX's PEG has been as high as 1.11 and as low as 0.89, with a median of 1.

Finally, we should also recognize that GATX has a P/CF ratio of 5.39. 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. This stock's P/CF looks attractive against its industry's average P/CF of 7.44. GATX's P/CF has been as high as 5.71 and as low as 3.13, with a median of 5.22, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Gatx is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GATX feels like a great value stock at the moment.

In-Depth Zacks Research for the Tickers Above

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

GATX Corporation (GATX) - free report >>

Published in