Is ArcBest (ARCB) a Great Value Stock Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
ArcBest (ARCB) is a stock many investors are watching right now. ARCB is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 10.45 right now. For comparison, its industry sports an average P/E of 21.22. Over the past year, ARCB's Forward P/E has been as high as 20.26 and as low as 10.10, with a median of 12.36.
We also note that ARCB holds a PEG ratio of 0.45. 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 past 52 weeks, ARCB's PEG has been as high as 1.41 and as low as 0.44, with a median of 1.12.
Another valuation metric that we should highlight is ARCB's P/B ratio of 1.88. 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 stock's P/B looks attractive against its industry's average P/B of 3.99. Within the past 52 weeks, ARCB's P/B has been as high as 2.70 and as low as 0.95, with a median of 1.69.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ARCB has a P/S ratio of 0.51. This compares to its industry's average P/S of 1.37.
Finally, our model also underscores that ARCB has a P/CF ratio of 6.88. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.15. Over the past year, ARCB's P/CF has been as high as 11.47 and as low as 5.02, with a median of 7.12.
These figures are just a handful of the metrics value investors tend to look at, but they help show that ArcBest is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARCB feels like a great value stock at the moment.
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