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Are Investors Undervaluing Gatx (GATX) Right Now?

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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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Gatx (GATX - Free Report) is a stock many investors are watching right now. GATX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.87 right now. For comparison, its industry sports an average P/E of 13.88. Over the past 52 weeks, GATX's Forward P/E has been as high as 16.70 and as low as 9.49, with a median of 14.97.

We also note that GATX holds a PEG ratio of 0.66. 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. GATX's PEG compares to its industry's average PEG of 1.27. Over the last 12 months, GATX's PEG has been as high as 1.11 and as low as 0.63, with a median of 1.

We should also highlight that GATX has a P/B ratio of 1.08. The P/B ratio pits a stock's market value against 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 1.29. Over the past year, GATX's P/B has been as high as 1.67 and as low as 1.04, with a median of 1.51.

Finally, investors will want to recognize that GATX has a P/CF ratio of 3.63. 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. GATX's current P/CF looks attractive when compared to its industry's average P/CF of 7.60. Over the past 52 weeks, GATX's P/CF has been as high as 5.71 and as low as 3.49, with a median of 5.21.

These are only a few of the key metrics included in Gatx'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, GATX looks like an impressive value stock at the moment.


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