Are Investors Undervaluing ArcBest (ARCB) Right Now?
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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company value investors might notice is ArcBest (ARCB). ARCB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 15.24, which compares to its industry's average of 22.19. Over the last 12 months, ARCB's Forward P/E has been as high as 20.26 and as low as 10.37, with a median of 14.67.
Investors will also notice that ARCB has a PEG ratio of 1. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ARCB's PEG compares to its industry's average PEG of 1.46. Over the past 52 weeks, ARCB's PEG has been as high as 2.19 and as low as 0.88, with a median of 1.23.
Another notable valuation metric for ARCB is its P/B ratio of 2.29. 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. This stock's P/B looks solid versus its industry's average P/B of 3.89. ARCB's P/B has been as high as 2.70 and as low as 0.73, with a median of 1.34, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ARCB has a P/S ratio of 0.58. This compares to its industry's average P/S of 1.48.
Finally, investors will want to recognize that ARCB has a P/CF ratio of 9.75. 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 15.20. Within the past 12 months, ARCB's P/CF has been as high as 11.47 and as low as 3.78, with a median of 6.56.
Value investors will likely look at more than just these metrics, but the above data helps show that ArcBest is likely undervalued currently. And when considering the strength of its earnings outlook, ARCB sticks out at as one of the market's strongest value stocks.
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