Investors interested in stocks from the Transportation - Shipping sector have probably already heard of Seaspan (SSW) and Martin Midstream Partners L.P. (MMLP). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Seaspan is sporting a Zacks Rank of #2 (Buy), while Martin Midstream Partners L.P. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SSW is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
SSW currently has a forward P/E ratio of 9.35, while MMLP has a forward P/E of 85.61. We also note that SSW has a PEG ratio of 0.60. 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. MMLP currently has a PEG ratio of 42.81.
Another notable valuation metric for SSW is its P/B ratio of 0.49. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, MMLP has a P/B of 1.53.
These are just a few of the metrics contributing to SSW's Value grade of A and MMLP's Value grade of C.
SSW has seen stronger estimate revision activity and sports more attractive valuation metrics than MMLP, so it seems like value investors will conclude that SSW is the superior option right now.
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Seaspan Corporation (SSW) : Free Stock Analysis Report
Martin Midstream Partners L.P. (MMLP) : Free Stock Analysis Report
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