Should Value Investors Buy Costamare (CMRE) Stock?
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.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Costamare (CMRE). CMRE is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.19. This compares to its industry's average Forward P/E of 14.39. CMRE's Forward P/E has been as high as 13.94 and as low as 5.42, with a median of 8.67, all within the past year.
We also note that CMRE holds a PEG ratio of 1.24. 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. CMRE's PEG compares to its industry's average PEG of 1.97. CMRE's PEG has been as high as 2.21 and as low as 1.08, with a median of 1.46, all within the past year.
Another notable valuation metric for CMRE is its P/B ratio of 0.43. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 0.94. CMRE's P/B has been as high as 0.67 and as low as 0.34, with a median of 0.55, over the past year.
Finally, we should also recognize that CMRE has a P/CF ratio of 3.57. 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. CMRE's P/CF compares to its industry's average P/CF of 9.94. Over the past year, CMRE's P/CF has been as high as 5.58 and as low as 3.07, with a median of 4.24.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Costamare is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CMRE feels like a great value stock at the moment.
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