Should Value Investors Buy Covenant Logistics Group (CVLG) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 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 company to watch right now is Covenant Logistics Group (CVLG). CVLG is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.57. This compares to its industry's average Forward P/E of 16.34. Over the past 52 weeks, CVLG's Forward P/E has been as high as 9.80 and as low as 4.97, with a median of 6.54.
We should also highlight that CVLG has a P/B ratio of 1.33. 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. CVLG's current P/B looks attractive when compared to its industry's average P/B of 3.58. Over the past 12 months, CVLG's P/B has been as high as 1.75 and as low as 0.81, with a median of 1.15.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CVLG has a P/S ratio of 0.35. This compares to its industry's average P/S of 1.
Finally, investors should note that CVLG has a P/CF ratio of 3.74. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.08. Over the past year, CVLG's P/CF has been as high as 8.04 and as low as 2.42, with a median of 3.45.
If you're looking for another solid Transportation - Truck value stock, take a look at KnightSwift Transportation (KNX). KNX is a # 2 (Buy) stock with a Value score of A.
Shares of KnightSwift Transportation currently holds a Forward P/E ratio of 10.69, and its PEG ratio is 0.71. In comparison, its industry sports average P/E and PEG ratios of 16.34 and 1.11.
Over the last 12 months, KNX's P/E has been as high as 13.50, as low as 8.56, with a median of 10.82, and its PEG ratio has been as high as 0.90, as low as 0.57, with a median of 0.72.
KnightSwift Transportation sports a P/B ratio of 1.28 as well; this compares to its industry's price-to-book ratio of 3.58. In the past 52 weeks, KNX's P/B has been as high as 1.62, as low as 1.09, with a median of 1.36.
These are only a few of the key metrics included in Covenant Logistics Group and KnightSwift Transportation strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CVLG and KNX look like an impressive value stock at the moment.
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Covenant Logistics Group, Inc. (CVLG) : Free Stock Analysis Report
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