Should Value Investors Buy Great Lakes Dredge & Dock (GLDD) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One company to watch right now is Great Lakes Dredge & Dock (GLDD). GLDD is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 14.38 right now. For comparison, its industry sports an average P/E of 17.75. Over the past 52 weeks, GLDD's Forward P/E has been as high as 15.23 and as low as 9.59, with a median of 12.35.

Investors should also recognize that GLDD has a P/B ratio of 1.59. The P/B is a method of comparing a stock's market value to 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 3.83. Over the past year, GLDD's P/B has been as high as 2.01 and as low as 1.15, with a median of 1.51.

Finally, our model also underscores that GLDD has a P/CF ratio of 5.79. 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 stock's P/CF looks attractive against its industry's average P/CF of 17. GLDD's P/CF has been as high as 7.96 and as low as 4.20, with a median of 6.58, all within the past year.

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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This article originally published on Zacks Investment Research (zacks.com).

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