Are Investors Undervaluing Hub Group (HUBG) Right Now?
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 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 to watch right now is Hub Group (HUBG). HUBG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 9.40, which compares to its industry's average of 10.06. Over the past 52 weeks, HUBG's Forward P/E has been as high as 21.60 and as low as 7.84, with a median of 13.83.
Another notable valuation metric for HUBG is its P/B ratio of 1.86. 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. This company's current P/B looks solid when compared to its industry's average P/B of 3.61. HUBG's P/B has been as high as 2.40 and as low as 1.49, with a median of 1.97, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HUBG has a P/S ratio of 0.56. This compares to its industry's average P/S of 0.74.
Finally, our model also underscores that HUBG has a P/CF ratio of 6.11. 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 stock's P/CF looks attractive against its industry's average P/CF of 13.29. Within the past 12 months, HUBG's P/CF has been as high as 12.39 and as low as 5.10, with a median of 8.92.
Kuehne & Nagel International (KHNGY) may be another strong Transportation - Services stock to add to your shortlist. KHNGY is a # 2 (Buy) stock with a Value grade of A.
Furthermore, Kuehne & Nagel International holds a P/B ratio of 7.01 and its industry's price-to-book ratio is 3.61. KHNGY's P/B has been as high as 15.69, as low as 6.58, with a median of 9.58 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Hub Group and Kuehne & Nagel International are likely undervalued currently. And when considering the strength of its earnings outlook, HUBG and KHNGY sticks out as one of the market's strongest value stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Hub Group, Inc. (HUBG) : Free Stock Analysis Report
Kuehne & Nagel International Ag (KHNGY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
