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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company to watch right now is CAI International (CAI). CAI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 5.79, which compares to its industry’s average of 11.27. Over the past 52 weeks, CAI’s Forward P/E has been as high as 7.55 and as low as 4.95, with a median of 5.72.
Investors should also note that CAI holds a PEG ratio of 0.72. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company’s expected EPS growth rate. CAI’s industry currently sports an average PEG of 1.10. Within the past year, CAI’s PEG has been as high as 0.94 and as low as 0.62, with a median of 0.71.
We should also highlight that CAI has a P/B ratio of 0.81. 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. CAI’s current P/B looks attractive when compared to its industry’s average P/B of 1.31. Over the past year, CAI’s P/B has been as high as 0.98 and as low as 0.65, with a median of 0.79.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CAI has a P/S ratio of 1.15. This compares to its industry’s average P/S of 1.26.
Finally, our model also underscores that CAI has a P/CF ratio of 2.20. 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. CAI’s current P/CF looks attractive when compared to its industry’s average P/CF of 4.22. Over the past 52 weeks, CAI’s P/CF has been as high as 3.07 and as low as 1.76, with a median of 2.23.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CAI International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CAI feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment