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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Great Lakes Dredge & Dock (GLDD). GLDD is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 12.59, while its industry has an average P/E of 20.69. GLDD's Forward P/E has been as high as 15.23 and as low as 9.59, with a median of 12.38, all within the past year.
Investors will also notice that GLDD has a PEG ratio of 1.05. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GLDD's PEG compares to its industry's average PEG of 1.30. Within the past year, GLDD's PEG has been as high as 1.20 and as low as 0.27, with a median of 0.40.
Another valuation metric that we should highlight is GLDD's P/B ratio of 1.69. 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 stock's P/B looks attractive against its industry's average P/B of 4.63. Over the past 12 months, GLDD's P/B has been as high as 2.01 and as low as 1.13, with a median of 1.59.
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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