Are These Transportation Stocks Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
One company to watch right now is Marten Transport (MRTN). MRTN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 17.82, while its industry has an average P/E of 22.64. Over the past year, MRTN's Forward P/E has been as high as 19.31 and as low as 13.82, with a median of 15.73.
Another valuation metric that we should highlight is MRTN's P/B ratio of 2.34. 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. MRTN's current P/B looks attractive when compared to its industry's average P/B of 4.72. Over the past 12 months, MRTN's P/B has been as high as 2.42 and as low as 1.89, with a median of 2.19.
Finally, our model also underscores that MRTN has a P/CF ratio of 7.96. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.68. MRTN's P/CF has been as high as 8.78 and as low as 6.73, with a median of 7.76, all within the past year.
USA Truck (USAK) may be another strong Transportation - Truck stock to add to your shortlist. USAK is a # 2 (Buy) stock with a Value grade of A.
Furthermore, USA Truck holds a P/B ratio of 1.89 and its industry's price-to-book ratio is 4.72. USAK's P/B has been as high as 2.10, as low as 0.90, with a median of 1.53 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Marten Transport and USA Truck are likely undervalued currently. And when considering the strength of its earnings outlook, MRTN and USAK sticks out as one of the market's strongest value stocks.
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Marten Transport, Ltd. (MRTN) : Free Stock Analysis Report
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