Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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 stock to keep an eye on is The Greenbrier Companies (GBX). GBX is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.99, which compares to its industry's average of 16.02. Over the last 12 months, GBX's Forward P/E has been as high as 14.07 and as low as 8.99, with a median of 11.67.
Investors will also notice that GBX has a PEG ratio of 0.77. 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. GBX's industry has an average PEG of 1.35 right now. Over the past 52 weeks, GBX's PEG has been as high as 2.01 and as low as 0.49, with a median of 0.86.
We should also highlight that GBX has a P/B ratio of 1.09. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.71. Within the past 52 weeks, GBX's P/B has been as high as 1.41 and as low as 0.92, with a median of 1.10.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. GBX has a P/S ratio of 0.47. This compares to its industry's average P/S of 1.02.
Finally, our model also underscores that GBX has a P/CF ratio of 6.02. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. GBX's P/CF compares to its industry's average P/CF of 6.58. Over the past year, GBX's P/CF has been as high as 8.17 and as low as 5.45, with a median of 7.12.
These are only a few of the key metrics included in The Greenbrier Companies'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, GBX looks like an impressive value stock at the moment.
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Greenbrier Companies, Inc. (The) (GBX) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
