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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 company to watch right now is ArcBest (ARCB). ARCB is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 11.62, while its industry has an average P/E of 26.27. Over the last 12 months, ARCB's Forward P/E has been as high as 15.45 and as low as 8.11, with a median of 11.49.
Investors should also note that ARCB holds a PEG ratio of 0.64. 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. ARCB's PEG compares to its industry's average PEG of 1.18. Over the last 12 months, ARCB's PEG has been as high as 2.35 and as low as 0.39, with a median of 0.97.
Investors should also recognize that ARCB has a P/B ratio of 1.35. Investors use the P/B ratio to look at a stock's market value versus 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 3.60. Over the past 12 months, ARCB's P/B has been as high as 2.40 and as low as 1.01, with a median of 1.78.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ARCB has a P/S ratio of 0.43. This compares to its industry's average P/S of 0.97.
Finally, investors will want to recognize that ARCB has a P/CF ratio of 5.30. 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. ARCB's current P/CF looks attractive when compared to its industry's average P/CF of 13.65. Over the past 52 weeks, ARCB's P/CF has been as high as 10.93 and as low as 3.98, with a median of 7.03.
Value investors will likely look at more than just these metrics, but the above data helps show that ArcBest is likely undervalued currently. And when considering the strength of its earnings outlook, ARCB sticks out as one of the market's strongest value stocks.
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ArcBest Corporation (ARCB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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