Should Value Investors Buy H&E Equipment Services (HEES) 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.
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company value investors might notice is H&E Equipment Services (HEES). HEES is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 9.82, while its industry has an average P/E of 12.02. Over the past year, HEES's Forward P/E has been as high as 14.03 and as low as 7.96, with a median of 10.48.
HEES is also sporting a PEG ratio of 0.73. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HEES's industry has an average PEG of 0.96 right now. Over the past 52 weeks, HEES's PEG has been as high as 1.39 and as low as 0.36, with a median of 0.86.
Another notable valuation metric for HEES is its P/B ratio of 3.50. 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 company's current P/B looks solid when compared to its industry's average P/B of 5.13. Over the past 12 months, HEES's P/B has been as high as 5.05 and as low as 2.85, with a median of 3.73.
Finally, investors will want to recognize that HEES has a P/CF ratio of 3.08. 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. HEES's current P/CF looks attractive when compared to its industry's average P/CF of 8.70. Within the past 12 months, HEES's P/CF has been as high as 4.63 and as low as 2.53, with a median of 3.29.
These are only a few of the key metrics included in H&E Equipment Services's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HEES looks like an impressive value stock at the moment.
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H&E Equipment Services, Inc. (HEES) : Free Stock Analysis Report
