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Is Ardmore Shipping (ASC) Stock Undervalued Right Now?

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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.

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Ardmore Shipping (ASC) is a stock many investors are watching right now. ASC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

We should also highlight that ASC has a P/B ratio of 0.45. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. ASC's current P/B looks attractive when compared to its industry's average P/B of 0.86. Over the past 12 months, ASC's P/B has been as high as 0.97 and as low as 0.41, with a median of 0.68.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ASC has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.64.

Finally, investors should note that ASC has a P/CF ratio of 4.67. 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. This stock's P/CF looks attractive against its industry's average P/CF of 7.95. Within the past 12 months, ASC's P/CF has been as high as 17.80 and as low as -1,322.91, with a median of -32.28.

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


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