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Are Investors Undervaluing These Transportation Stocks Right Now?

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·3 min read
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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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Euroseas (ESEA) is a stock many investors are watching right now. ESEA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 1.84, while its industry has an average P/E of 4.29. Over the past year, ESEA's Forward P/E has been as high as 4.75 and as low as 1.76, with a median of 3.09.

Finally, investors should note that ESEA has a P/CF ratio of 3.86. 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 5.30. ESEA's P/CF has been as high as 14.90 and as low as 3.56, with a median of 7.61, all within the past year.

Investors could also keep in mind StealthGas (GASS), an Transportation - Shipping stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

StealthGas sports a P/B ratio of 0.13 as well; this compares to its industry's price-to-book ratio of 1.20. In the past 52 weeks, GASS's P/B has been as high as 0.22, as low as 0.13, with a median of 0.18.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Euroseas and StealthGas are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ESEA and GASS feels like a great value stock at the moment.

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
Euroseas Ltd. (ESEA) : Free Stock Analysis Report
StealthGas, Inc. (GASS) : Free Stock Analysis Report
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Zacks Investment Research