Should Value Investors Buy These Transportation Stocks?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 value investors might notice is Costamare (CMRE). CMRE is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 2.90. This compares to its industry's average Forward P/E of 3.85. CMRE's Forward P/E has been as high as 6.97 and as low as 2.84, with a median of 5.18, all within the past year.
We should also highlight that CMRE has a P/B ratio of 0.94. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 0.99. Over the past 12 months, CMRE's P/B has been as high as 1.37 and as low as 0.71, with a median of 0.95.
Finally, investors should note that CMRE has a P/CF ratio of 3.39. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.95. CMRE's P/CF has been as high as 9.86 and as low as 3.18, with a median of 5.46, all within the past year.
Investors could also keep in mind ZIM Integrated Shipping Services (ZIM), an Transportation - Shipping stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
ZIM Integrated Shipping Services also has a P/B ratio of 2.07 compared to its industry's price-to-book ratio of 0.99. Over the past year, its P/B ratio has been as high as 11.79, as low as -21.22, with a median of 2.06.
These are only a few of the key metrics included in Costamare and ZIM Integrated Shipping Services strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CMRE and ZIM look like an impressive value stock at the moment.
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Costamare Inc. (CMRE) : Free Stock Analysis Report
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