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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One company value investors might notice is Great Lakes Dredge & Dock (GLDD). GLDD is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 11.47, which compares to its industry's average of 21.59. Over the past year, GLDD's Forward P/E has been as high as 15.23 and as low as 9.59, with a median of 12.40.
Investors should also note that GLDD holds a PEG ratio of 0.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GLDD's PEG compares to its industry's average PEG of 1.32. Over the last 12 months, GLDD's PEG has been as high as 1.20 and as low as 0.27, with a median of 0.42.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GLDD has a P/S ratio of 0.98. This compares to its industry's average P/S of 1.03.
These are just a handful of the figures considered in Great Lakes Dredge & Dock's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GLDD is an impressive value stock right now.
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Great Lakes Dredge & Dock Corporation (GLDD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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