Should Value Investors Buy A.P. Moller-Maersk (AMKBY) 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is A.P. Moller-Maersk (AMKBY). AMKBY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another valuation metric that we should highlight is AMKBY's P/B ratio of 0.65. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. AMKBY's current P/B looks attractive when compared to its industry's average P/B of 1.04. AMKBY's P/B has been as high as 1.08 and as low as 0.50, with a median of 0.66, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. AMKBY has a P/S ratio of 0.48. This compares to its industry's average P/S of 1.05.
Finally, investors will want to recognize that AMKBY has a P/CF ratio of 1.08. 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. This stock's P/CF looks attractive against its industry's average P/CF of 2.89. Within the past 12 months, AMKBY's P/CF has been as high as 1.76 and as low as 0.83, with a median of 1.09.
Teekay Tankers (TNK) may be another strong Transportation - Shipping stock to add to your shortlist. TNK is a # 1 (Strong Buy) stock with a Value grade of A.
Teekay Tankers is trading at a forward earnings multiple of 3.81 at the moment, with a PEG ratio of 1.27. This compares to its industry's average P/E of 5.23 and average PEG ratio of 0.29.
TNK's Forward P/E has been as high as 100.08 and as low as 1.98, with a median of 4.21. During the same time period, its PEG ratio has been as high as 33.36, as low as 0.66, with a median of 1.40.
Additionally, Teekay Tankers has a P/B ratio of 1.03 while its industry's price-to-book ratio sits at 1.04. For TNK, this valuation metric has been as high as 1.51, as low as 0.72, with a median of 1.08 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that A.P. Moller-Maersk and Teekay Tankers are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AMKBY and TNK feels like a great value stock at the moment.
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A.P. Moller-Maersk (AMKBY) : Free Stock Analysis Report
Teekay Tankers Ltd. (TNK) : Free Stock Analysis Report
