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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Universal Logistics (ULH). ULH is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 12.28. This compares to its industry's average Forward P/E of 18.00. Over the past 52 weeks, ULH's Forward P/E has been as high as 14.16 and as low as 6.01, with a median of 9.87.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by 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. ULH has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.95.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Universal Logistics is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ULH feels like a great value stock at the moment.
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Universal Logistics Holdings, Inc. (ULH): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).