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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Global Ship Lease (GSL) is a stock many investors are watching right now. GSL is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Another notable valuation metric for GSL is its P/B ratio of 0.69. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. GSL's current P/B looks attractive when compared to its industry's average P/B of 1.65. Over the past year, GSL's P/B has been as high as 0.71 and as low as 0.41, with a median of 0.58.
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. GSL has a P/S ratio of 1.64. This compares to its industry's average P/S of 1.65.
Finally, investors should note that GSL has a P/CF ratio of 2.25. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.29. Over the past year, GSL's P/CF has been as high as 2.34 and as low as 1.31, with a median of 1.82.
Value investors will likely look at more than just these metrics, but the above data helps show that Global Ship Lease is likely undervalued currently. And when considering the strength of its earnings outlook, GSL sticks out as one of the market's strongest value stocks.
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Global Ship Lease, Inc. (GSL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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