Narrow transportation

Should value investors buy these transport stocks?

HAt Zacks, we focus on Zacks’ proven ranking system, which emphasizes profit estimates and estimate reviews to find great stocks. Nevertheless, we are always attentive to the latest trends in value, growth and dynamism to highlight the right choices.

Looking at the history of these trends, perhaps none is more popular than value investing. This strategy simply seeks to identify companies that are undervalued by the market at large. Value investors use a variety of methods, including proven valuation metrics, to find these stocks.

Fortunately, Zacks has developed his own style scoring system with the aim of finding stocks with specific characteristics. Value investors will be interested in the “Value” category of the system. Stocks with both an “A” rating in the Value category and high Zacks ranks are some of the most profitable stocks on the market right now.

One company to watch right now is Golden Ocean Group (GOGL). GOGL currently sports a Zacks rating of 2 (Buy), as well as an A rating for value.

Note also that GOGL has a P / N ratio of 0.60. Investors use the P / B ratio to compare the market value of a stock against its book value, which is defined as total assets minus total liabilities. This stock’s P / B looks attractive compared to its industry’s average P / B of 0.95. Over the past year, GOGL’s P / B has reached 0.96 and as low as 0.48, with a median of 0.73.

Value investors also use the P / S ratio. The P / S ratio is calculated as the price divided by the sales. This is a preferred metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. GOGL has a P / S ratio of 1.18. This compares to its industry’s average P / S of 1.35.

Finally, our model also points out that GOGL has a P / CF ratio of 3.38. This metric takes into account a company’s operating cash flow and can be used to find undervalued stocks based on their strong cash flow outlook. This company’s current P / CF looks strong compared to its industry average P / CF of 5.85. Over the past 52 weeks, GOGL’s P / CF has been as high as 295.23 and as low as -96.07, with a median of 6.18.

Star Bulk Carriers (SBLK) can be another important stock transport – shipment to add to your shortlist. SBLK is a # 2 (Buy) share with a value rating of A.

Star Bulk Carriers also has a P / N ratio of 1.12; this compares to its industry’s price-to-book ratio of 0.95. Over the past 52 weeks, SBLK’s P / B has been as high as 1.47, as low as 0.49, with a median of 1.12.

These numbers are just a handful of metrics investors tend to look at, but they help show that Golden Ocean Group and Star Bulk Carriers are likely undervalued right now. Given this, along with its strong earnings outlook, GOGL and SBLK currently feel like high value stocks.

Click to get this free report

Golden Ocean Group Limited (GOGL): Free Stock Analysis Report

Star Bulk Carriers Corp. (SBLK): Free Stock Analysis Report

To read this article on Zacks.com, click here.

Zacks investment research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


Source link