Are Investors Undervaluing H&E Equipment Services (HEES) 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is H&E Equipment Services (HEES). HEES is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.01 right now. For comparison, its industry sports an average P/E of 12.64. Over the last 12 months, HEES's Forward P/E has been as high as 14.03 and as low as 7.96, with a median of 10.79.
We also note that HEES holds a PEG ratio of 0.74. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HEES's PEG compares to its industry's average PEG of 0.97. HEES's PEG has been as high as 1.39 and as low as 0.34, with a median of 0.86, all within the past year.
Investors should also recognize that HEES has a P/B ratio of 3.66. Investors use the P/B ratio to look at a stock's market value versus 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 6.15. Over the past year, HEES's P/B has been as high as 5.05 and as low as 2.85, with a median of 3.83.
Finally, investors should note that HEES has a P/CF ratio of 3.23. 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. HEES's current P/CF looks attractive when compared to its industry's average P/CF of 9.93. Over the past year, HEES's P/CF has been as high as 4.63 and as low as 2.53, with a median of 3.39.
Value investors will likely look at more than just these metrics, but the above data helps show that H&E Equipment Services is likely undervalued currently. And when considering the strength of its earnings outlook, HEES sticks out at as one of the market's strongest value stocks.
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H&E Equipment Services, Inc. (HEES) : Free Stock Analysis Report
