Are Investors Undervaluing These Transportation Stocks Right Now?

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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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Danaos (DAC). DAC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 3.46, which compares to its industry’s average of 4.20. Over the past year, DAC’s Forward P/E has been as high as 5.30 and as low as 1.39, with a median of 3.83.

We should also highlight that DAC has a P/B ratio of 0.77. 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. DAC’s current P/B looks attractive when compared to its industry’s average P/B of 1.01. DAC’s P/B has been as high as 1.19 and as low as 0.30, with a median of 0.81, over the past year.

Nippon Yusen Kabushiki Kaisha (NPNYY) may be another strong Transportation – Shipping stock to add to your shortlist. NPNYY is a # 2 (Buy) stock with a Value grade of A.

Furthermore, Nippon Yusen Kabushiki Kaisha holds a P/B ratio of 1.53 and its industry’s price-to-book ratio is 1.01. NPNYY’s P/B has been as high as 2.30, as low as 0.72, with a median of 1.14 over the past 12 months.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Danaos and Nippon Yusen Kabushiki Kaisha are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DAC and NPNYY feels like a great value stock at the moment.

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Danaos Corporation (DAC) : Free Stock Analysis Report
 
Nippon Yusen Kabushiki Kaisha (NPNYY) : Free Stock Analysis Report
 
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