Should Value Investors Buy Werner Enterprises (WERN) 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 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.
Werner Enterprises (WERN) is a stock many investors are watching right now. WERN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 15.11, while its industry has an average P/E of 17.66. Over the past year, WERN's Forward P/E has been as high as 31.51 and as low as 15.01, with a median of 18.49.
Another valuation metric that we should highlight is WERN's P/B ratio of 2.18. 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 2.81. Over the past year, WERN's P/B has been as high as 2.73 and as low as 2.03, with a median of 2.33.
Finally, our model also underscores that WERN has a P/CF ratio of 5.92. 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. WERN's P/CF compares to its industry's average P/CF of 10.63. Over the past year, WERN's P/CF has been as high as 9.50 and as low as 5.71, with a median of 6.57.
Value investors will likely look at more than just these metrics, but the above data helps show that Werner Enterprises is likely undervalued currently. And when considering the strength of its earnings outlook, WERN sticks out at as one of the market's strongest value stocks.
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