Should Value Investors Buy Echo Global Logistics (ECHO) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Echo Global Logistics (ECHO). ECHO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 13.44 right now. For comparison, its industry sports an average P/E of 17.50. Over the past year, ECHO's Forward P/E has been as high as 39.42 and as low as 13.09, with a median of 19.72.
Investors should also note that ECHO holds a PEG ratio of 0.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ECHO's PEG compares to its industry's average PEG of 0.87. Within the past year, ECHO's PEG has been as high as 2.25 and as low as 0.75, with a median of 1.13.
Investors should also recognize that ECHO has a P/B ratio of 1.83. 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. This company's current P/B looks solid when compared to its industry's average P/B of 3.61. Over the past year, ECHO's P/B has been as high as 2.77 and as low as 1.77, with a median of 2.21.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ECHO has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.79.
Finally, we should also recognize that ECHO has a P/CF ratio of 10.04. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.80. Over the past year, ECHO's P/CF has been as high as 27.41 and as low as 9.73, with a median of 14.91.
These are just a handful of the figures considered in Echo Global Logistics's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ECHO is an impressive value stock right now.
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