Are Investors Undervaluing General Finance (GFN) Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
General Finance (GFN) is a stock many investors are watching right now. GFN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 21.41, while its industry has an average P/E of 45.54. Over the past year, GFN's Forward P/E has been as high as 34.38 and as low as 6.46, with a median of 19.40.
Investors should also note that GFN holds a PEG ratio of 1.78. 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. GFN's industry currently sports an average PEG of 3.96. Over the past 52 weeks, GFN's PEG has been as high as 2.87 and as low as 0.54, with a median of 1.62.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. GFN has a P/S ratio of 0.9. This compares to its industry's average P/S of 1.09.
These are just a handful of the figures considered in General Finance's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GFN is an impressive value stock right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
General Finance Corporation (GFN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
