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Should Value Investors Buy These Transportation Stocks?

·3 min read

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Ryder System (R). R is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.22 right now. For comparison, its industry sports an average P/E of 11.67. Over the past 52 weeks, R's Forward P/E has been as high as 17.17 and as low as 7.90, with a median of 10.80.

Another valuation metric that we should highlight is R's P/B ratio of 1.57. 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 1.61. Within the past 52 weeks, R's P/B has been as high as 2.06 and as low as 1.51, with a median of 1.76.

Another great Transportation - Equipment and Leasing stock you could consider is Textainer Group (TGH), which is a # 1 (Strong Buy) stock with a Value Score of A.

Textainer Group sports a P/B ratio of 1.31 as well; this compares to its industry's price-to-book ratio of 1.61. In the past 52 weeks, TGH's P/B has been as high as 1.40, as low as 0.78, with a median of 1.19.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Ryder System and Textainer Group are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, R and TGH feels like a great value stock at the moment.


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Ryder System, Inc. (R) : Free Stock Analysis Report
 
Textainer Group Holdings Limited (TGH) : Free Stock Analysis Report
 
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