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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Navigator Holdings (NVGS). NVGS is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.
Investors should also recognize that NVGS has a P/B ratio of 0.91. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. NVGS's current P/B looks attractive when compared to its industry's average P/B of 2.19. Over the past year, NVGS's P/B has been as high as 1.00 and as low as 0.60, with a median of 0.89.
Finally, our model also underscores that NVGS has a P/CF ratio of 5.04. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. NVGS's current P/CF looks attractive when compared to its industry's average P/CF of 7.72. Within the past 12 months, NVGS's P/CF has been as high as 5.50 and as low as 3.36, with a median of 4.90.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Navigator Holdings is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, NVGS feels like a great value stock at the moment.
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Navigator Holdings Ltd. (NVGS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).