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Are Investors Undervaluing These Transportation Stocks Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Golden Ocean Group (GOGL - Free Report) . GOGL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another notable valuation metric for GOGL is its P/B ratio of 0.83. 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 1.24. Within the past 52 weeks, GOGL's P/B has been as high as 0.96 and as low as 0.56, with a median of 0.76.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GOGL has a P/S ratio of 1.41. This compares to its industry's average P/S of 1.47.
Finally, investors should note that GOGL has a P/CF ratio of 3.44. 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. GOGL's P/CF compares to its industry's average P/CF of 5.31. Within the past 12 months, GOGL's P/CF has been as high as 11.33 and as low as -96.07, with a median of 4.81.
Grindrod Shipping (GRIN - Free Report) may be another strong Transportation - Shipping stock to add to your shortlist. GRIN is a # 2 (Buy) stock with a Value grade of A.
Additionally, Grindrod Shipping has a P/B ratio of 1.43 while its industry's price-to-book ratio sits at 1.24. For GRIN, this valuation metric has been as high as 1.61, as low as 0.46, with a median of 0.92 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Golden Ocean Group and Grindrod Shipping are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GOGL and GRIN feels like a great value stock at the moment.
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Are Investors Undervaluing These Transportation Stocks Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Golden Ocean Group (GOGL - Free Report) . GOGL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another notable valuation metric for GOGL is its P/B ratio of 0.83. 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 1.24. Within the past 52 weeks, GOGL's P/B has been as high as 0.96 and as low as 0.56, with a median of 0.76.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GOGL has a P/S ratio of 1.41. This compares to its industry's average P/S of 1.47.
Finally, investors should note that GOGL has a P/CF ratio of 3.44. 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. GOGL's P/CF compares to its industry's average P/CF of 5.31. Within the past 12 months, GOGL's P/CF has been as high as 11.33 and as low as -96.07, with a median of 4.81.
Grindrod Shipping (GRIN - Free Report) may be another strong Transportation - Shipping stock to add to your shortlist. GRIN is a # 2 (Buy) stock with a Value grade of A.
Additionally, Grindrod Shipping has a P/B ratio of 1.43 while its industry's price-to-book ratio sits at 1.24. For GRIN, this valuation metric has been as high as 1.61, as low as 0.46, with a median of 0.92 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Golden Ocean Group and Grindrod Shipping are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GOGL and GRIN feels like a great value stock at the moment.