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Should Value Investors Buy Werner Enterprises (WERN) Stock?

Zacks Equity Research
MarineMax (HZO) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 to watch right now is Werner Enterprises (WERN). WERN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.63. This compares to its industry's average Forward P/E of 12.50. Over the past 52 weeks, WERN's Forward P/E has been as high as 31.51 and as low as 11.27, with a median of 17.11.

Another notable valuation metric for WERN is its P/B ratio of 1.72. Investors use the P/B ratio to look at a stock's market value versus 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 2.04. Over the past 12 months, WERN's P/B has been as high as 2.73 and as low as 1.67, with a median of 2.20.

Finally, we should also recognize that WERN has a P/CF ratio of 4.49. 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. WERN's current P/CF looks attractive when compared to its industry's average P/CF of 6.87. Within the past 12 months, WERN's P/CF has been as high as 9.50 and as low as 4.35, with a median of 6.05.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Werner Enterprises is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, WERN feels like a great value stock at the moment.

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