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Are Investors Undervaluing EURODRY LTD (EDRY) Right Now?

Zacks Equity Research
·2 min 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 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.

EURODRY LTD (EDRY) is a stock many investors are watching right now. EDRY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another valuation metric that we should highlight is EDRY's P/B ratio of 0.38. 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 company's current P/B looks solid when compared to its industry's average P/B of 0.44. Over the past 12 months, EDRY's P/B has been as high as 0.46 and as low as 0.19, with a median of 0.27.

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. EDRY has a P/S ratio of 0.57. This compares to its industry's average P/S of 0.8.

Value investors will likely look at more than just these metrics, but the above data helps show that EURODRY LTD is likely undervalued currently. And when considering the strength of its earnings outlook, EDRY sticks out at as one of the market's strongest value stocks.


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