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Should Value Investors Buy Ardmore Shipping (ASC) Stock?

Zacks Equity Research

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One stock to keep an eye on is Ardmore Shipping (ASC). ASC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another notable valuation metric for ASC is its P/B ratio of 0.62. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 0.86. Over the past 12 months, ASC's P/B has been as high as 0.97 and as low as 0.41, with a median of 0.69.

Finally, we should also recognize that ASC has a P/CF ratio of 6.41. 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. ASC's current P/CF looks attractive when compared to its industry's average P/CF of 7.95. ASC's P/CF has been as high as 17.80 and as low as -1,322.91, with a median of -36.19, all within the past year.

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


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