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Can Value Investors Pick Hub Group (HUBG) Stock Right Now?
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put, Hub Group, Inc. (HUBG - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Hub Group has a trailing twelve months PE ratio of 19.46, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 24.60. If we focus on the stock’s long-term PE trend, the current level Hub Group puts current PE ratio above its midpoint (which is 17.75) over the past five years.
Also, the stock’s PE compares favorably with the Zacks Transport sector’s trailing twelve months PE ratio, which stands at 33.44. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Hub Group has a forward PE ratio (price relative to this year’s earnings) of 26.86, so it is fair to expect an increase in the company’s share price in the near term.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, the stock has a P/S ratio of about 0.51. This is substantially lower than the S&P 500 average, which comes in at 3.81 right now. Also, as we can see in the chart below, this is slightly below the highs for this stock in particular over the past few years.
If anything, this suggests some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Hub Group currently has a Value Style Score of A, putting it into the top 20% of all stocks we cover from this look. This makes HUBG a solid choice for value investors and some of its other metrics make it clear too.
For example, its P/CF ratio comes in at 8.08, which is slightly better than the industry average of 8.48. Clearly, HUBG is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Hub Group might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of A and a Momentum score of D. This gives HUBG a VGM score—or its overarching fundamental grade—of A. (You can read more about the Zacks Style Scores here >>).
Meanwhile, the company’s recent earnings estimates have been encouraging. The current quarter has seen five estimates go higher in the past sixty days and none lower, while current year estimate has seen seven upward and no downward revision in the same time period.
This has had a noticeable impact on the consensus estimate. The current quarter consensus estimate has risen 25% in the past two months, while the current year estimate has risen 15.9% in the same time period. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Despite having a bullish trend, HUBG sports a Zacks Rank #3 (Hold). This indicates that analysts have some apprehensions about the stock in the immediate future. Thus, we are looking for in-line performance from the company in the near term.
Bottom Line
Hub GroupGroup is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However with a sluggish industry rank (Bottom 30% out of more than 250 industries) and a Zacks Rank #3, it is hard to get excited about the stock overall. In fact, over the past one year, the sector has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for broader factors to turn around in this name first, but once that happens, this stock could be a compelling pick.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Image: Bigstock
Can Value Investors Pick Hub Group (HUBG) Stock Right Now?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put, Hub Group, Inc. (HUBG - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Hub Group has a trailing twelve months PE ratio of 19.46, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 24.60. If we focus on the stock’s long-term PE trend, the current level Hub Group puts current PE ratio above its midpoint (which is 17.75) over the past five years.
Also, the stock’s PE compares favorably with the Zacks Transport sector’s trailing twelve months PE ratio, which stands at 33.44. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Hub Group has a forward PE ratio (price relative to this year’s earnings) of 26.86, so it is fair to expect an increase in the company’s share price in the near term.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, the stock has a P/S ratio of about 0.51. This is substantially lower than the S&P 500 average, which comes in at 3.81 right now. Also, as we can see in the chart below, this is slightly below the highs for this stock in particular over the past few years.
If anything, this suggests some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Hub Group currently has a Value Style Score of A, putting it into the top 20% of all stocks we cover from this look. This makes HUBG a solid choice for value investors and some of its other metrics make it clear too.
For example, its P/CF ratio comes in at 8.08, which is slightly better than the industry average of 8.48. Clearly, HUBG is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Hub Group might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of A and a Momentum score of D. This gives HUBG a VGM score—or its overarching fundamental grade—of A. (You can read more about the Zacks Style Scores here >>).
Meanwhile, the company’s recent earnings estimates have been encouraging. The current quarter has seen five estimates go higher in the past sixty days and none lower, while current year estimate has seen seven upward and no downward revision in the same time period.
This has had a noticeable impact on the consensus estimate. The current quarter consensus estimate has risen 25% in the past two months, while the current year estimate has risen 15.9% in the same time period. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Hub Group, Inc. Price and Consensus
Hub Group, Inc. price-consensus-chart | Hub Group, Inc. Quote
Despite having a bullish trend, HUBG sports a Zacks Rank #3 (Hold). This indicates that analysts have some apprehensions about the stock in the immediate future. Thus, we are looking for in-line performance from the company in the near term.
Bottom Line
Hub GroupGroup is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However with a sluggish industry rank (Bottom 30% out of more than 250 industries) and a Zacks Rank #3, it is hard to get excited about the stock overall. In fact, over the past one year, the sector has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for broader factors to turn around in this name first, but once that happens, this stock could be a compelling pick.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>