Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
StealthGas (GASS - Free Report) is a stock many investors are watching right now. GASS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GASS has a P/S ratio of 0.81. This compares to its industry's average P/S of 0.88.
Finally, we should also recognize that GASS has a P/CF ratio of 3.23. 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. GASS's current P/CF looks attractive when compared to its industry's average P/CF of 7.95. Within the past 12 months, GASS's P/CF has been as high as 4.77 and as low as 3.19, with a median of 3.72.
Value investors will likely look at more than just these metrics, but the above data helps show that StealthGas is likely undervalued currently. And when considering the strength of its earnings outlook, GASS sticks out at as one of the market's strongest value stocks.