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Is Covenant Logistics (CVLG) Stock Undervalued 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...

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This story originally appeared on Zacks

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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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.

Covenant Logistics (CVLG) is a stock many investors are watching right now. CVLG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

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. CVLG has a P/S ratio of 0.45. This compares to its industry's average P/S of 1.34.

Finally, investors will want to recognize that CVLG has a P/CF ratio of 6.16. 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. This stock's P/CF looks attractive against its industry's average P/CF of 16.02. Over the past 52 weeks, CVLG's P/CF has been as high as 15.81 and as low as 4.31, with a median of 6.44.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Covenant Logistics is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CVLG feels like a great value stock at the moment.



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