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Are Investors Undervaluing Continental (CTTAY) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Continental (CTTAY - Free Report) . CTTAY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.46. This compares to its industry's average Forward P/E of 13.34. Over the past year, CTTAY's Forward P/E has been as high as 12.07 and as low as 6.34, with a median of 7.45.

We also note that CTTAY holds a PEG ratio of 0.28. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CTTAY's industry has an average PEG of 0.80 right now. Over the past 52 weeks, CTTAY's PEG has been as high as 0.34 and as low as 0.21, with a median of 0.28.

Another notable valuation metric for CTTAY is its P/B ratio of 0.89. 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 attractive against its industry's average P/B of 1.72. CTTAY's P/B has been as high as 1.11 and as low as 0.72, with a median of 0.89, over the past year.

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. CTTAY has a P/S ratio of 0.31. This compares to its industry's average P/S of 0.7.

These are just a handful of the figures considered in Continental's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CTTAY is an impressive value stock right now.


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