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Is CAI International (CAI) a Great Value Stock Right Now?

Zacks Equity Research
·2 mins read

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 CAI International (CAI). CAI 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 5.30 right now. For comparison, its industry sports an average P/E of 13.85. Over the past year, CAI's Forward P/E has been as high as 18.76 and as low as 3.84, with a median of 6.12.

Another notable valuation metric for CAI is its P/B ratio of 0.45. 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 solid versus its industry's average P/B of 1.29. Within the past 52 weeks, CAI's P/B has been as high as 0.88 and as low as 0.32, with a median of 0.70.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CAI has a P/S ratio of 0.64. This compares to its industry's average P/S of 0.71.

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


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Zacks Investment Research