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.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Great Lakes Dredge & Dock (GLDD) is a stock many investors are watching right now. GLDD is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.97, which compares to its industry's average of 21.17. GLDD's Forward P/E has been as high as 15.23 and as low as 9.59, with a median of 12.40, all within the past year.
We also note that GLDD holds a PEG ratio of 1.00. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GLDD's PEG compares to its industry's average PEG of 1.29. 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 0.95.
Another valuation metric that we should highlight is GLDD's P/B ratio of 1.71. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 5.00. GLDD's P/B has been as high as 2.01 and as low as 1.13, with a median of 1.65, over the past year.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GLDD has a P/S ratio of 1.01. This compares to its industry's average P/S of 1.04.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Great Lakes Dredge & Dock is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GLDD feels like a great value stock at the moment.
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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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