Are Investors Undervaluing H&E Equipment (HEES) 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. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is H&E Equipment (HEES). HEES is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.77 right now. For comparison, its industry sports an average P/E of 9.98. Over the last 12 months, HEES's Forward P/E has been as high as 17.23 and as low as 8.49, with a median of 11.19.
We should also highlight that HEES has a P/B ratio of 3.24. The P/B ratio pits a stock's market value against 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 3.79. HEES's P/B has been as high as 5.88 and as low as 2.74, with a median of 3.64, over the past year.
Finally, investors will want to recognize that HEES has a P/CF ratio of 2.61. 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. HEES's P/CF compares to its industry's average P/CF of 6.44. Within the past 12 months, HEES's P/CF has been as high as 4.04 and as low as 1.83, with a median of 2.91.
These are just a handful of the figures considered in H&E Equipment'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 HEES is an impressive value stock right now.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.