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Are Investors Undervaluing Independent Contract Drilling (ICD) Right Now?

Zacks Equity Research

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 company value investors might notice is Independent Contract Drilling (ICD). ICD is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Another notable valuation metric for ICD is its P/B ratio of 0.31. 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 attractive against its industry's average P/B of 0.41. Over the past year, ICD's P/B has been as high as 0.85 and as low as 0.31, with a median of 0.63.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ICD has a P/S ratio of 0.63. This compares to its industry's average P/S of 0.64.

These are just a handful of the figures considered in Independent Contract Drilling'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 ICD is an impressive value stock right now.


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