Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Euroseas (ESEA) is a stock many investors are watching right now. ESEA is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 3.62 right now. For comparison, its industry sports an average P/E of 10.24. Over the past 52 weeks, ESEA's Forward P/E has been as high as 5.36 and as low as 1.91, with a median of 2.70.
Investors should also recognize that ESEA has a P/B ratio of 1.09. 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. ESEA's current P/B looks attractive when compared to its industry's average P/B of 2.27. Within the past 52 weeks, ESEA's P/B has been as high as 1.12 and as low as 0.51, with a median of 0.77.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ESEA has a P/S ratio of 2.05. This compares to its industry's average P/S of 2.08.
Finally, our model also underscores that ESEA has a P/CF ratio of 3.02. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ESEA's P/CF compares to its industry's average P/CF of 5.12. ESEA's P/CF has been as high as 3.12 and as low as 1.23, with a median of 1.96, all within the past year.
Seanergy Maritime Holdings (SHIP) may be another strong Transportation - Shipping stock to add to your shortlist. SHIP is a Zacks Rank of #1 (Strong Buy) stock with a Value grade of A.
Seanergy Maritime Holdings also has a P/B ratio of 0.69 compared to its industry's price-to-book ratio of 2.27. Over the past year, its P/B ratio has been as high as 1.02, as low as 0.41, with a median of 0.55.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Euroseas and Seanergy Maritime Holdings are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ESEA and SHIP feels like a great value stock at the moment.
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Euroseas Ltd. (ESEA): Free Stock Analysis Report
Seanergy Maritime Holdings Corp (SHIP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).