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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 value investors might notice is Great Lakes Dredge & Dock (GLDD). GLDD is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 11.69, which compares to its industry's average of 18.74. 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 12.20.
We also note that GLDD holds a PEG ratio of 0.97. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GLDD's PEG compares to its industry's average PEG of 1.17. 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 0.39.
Investors should also recognize that GLDD has a P/B ratio of 1.53. 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. GLDD's current P/B looks attractive when compared to its industry's average P/B of 4.09. Over the past year, GLDD's P/B has been as high as 2.01 and as low as 1.13, with a median of 1.52.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GLDD has a P/S ratio of 0.95. This compares to its industry's average P/S of 0.97.
Finally, investors will want to recognize that GLDD has a P/CF ratio of 5.33. 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. GLDD's current P/CF looks attractive when compared to its industry's average P/CF of 17.04. GLDD's P/CF has been as high as 7.61 and as low as 3.92, with a median of 6.44, all within the past year.
These are only a few of the key metrics included in Great Lakes Dredge & Dock's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GLDD looks like an impressive 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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