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Are Investors Undervaluing Diana Shipping (DSX) Right Now?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

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.

Diana Shipping (DSX) is a stock many investors are watching right now. DSX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors should also recognize that DSX has a P/B ratio of 0.57. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. DSX's current P/B looks attractive when compared to its industry's average P/B of 0.80. Over the past year, DSX's P/B has been as high as 0.64 and as low as 0.41, with a median of 0.54.

Finally, investors will want to recognize that DSX has a P/CF ratio of 4.72. 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 8.80. Within the past 12 months, DSX's P/CF has been as high as 5.31 and as low as -1.10, with a median of 4.33.

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


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