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.
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 Euroseas (ESEA). ESEA is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 3.62, while its industry has an average P/E of 7.30. Over the last 12 months, ESEA's Forward P/E has been as high as 5.36 and as low as 1.91, with a median of 2.70.
Another valuation metric that we should highlight is ESEA's P/B ratio of 1.09. 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. This company's current P/B looks solid when compared to its industry's average P/B of 1.56. 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.
Finally, we should also recognize that ESEA has a P/CF ratio of 3.02. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.02. Over the past year, ESEA's P/CF has been as high as 3.12 and as low as 1.23, with a median of 1.96.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Euroseas is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ESEA feels like a great value stock at the moment.
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Euroseas Ltd. (ESEA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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