Should Value Investors Buy ArcBest (ARCB) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is ArcBest (ARCB). ARCB is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.05, while its industry has an average P/E of 21.25. Over the past 52 weeks, ARCB's Forward P/E has been as high as 20.26 and as low as 10.10, with a median of 12.45.
Investors will also notice that ARCB has a PEG ratio of 0.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ARCB's PEG compares to its industry's average PEG of 1.23. Over the last 12 months, ARCB's PEG has been as high as 1.56 and as low as 0.44, with a median of 1.13.
Investors should also recognize that ARCB has a P/B ratio of 1.91. 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 company's current P/B looks solid when compared to its industry's average P/B of 3.96. ARCB's P/B has been as high as 2.70 and as low as 0.95, with a median of 1.64, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ARCB has a P/S ratio of 0.49. This compares to its industry's average P/S of 1.36.
Finally, our model also underscores that ARCB has a P/CF ratio of 6.98. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.05. ARCB's P/CF has been as high as 11.47 and as low as 5.02, with a median of 7.04, all within the past year.
These are just a handful of the figures considered in ArcBest's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ARCB is an impressive value stock right now.
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