Shares of Pointer Telocation Ltd.PNTR have returned over 100% so far this year, comparing favorably with its industry's gain of 4.5%. Also, the company has outperformed the industry in each of 4-week, 12-week and 52-week time frames.
Pointer Telocation has remarkably beaten earnings estimates in all of the trailing four quarters, recording an average beat of 59.4%.
Lately, the company's earnings estimates have been trending upward. The Zacks Consensus Estimate for the current year increased 11.5% in the last 60 days. Additionally, estimates for 2018 advanced 15.9% in the same time frame, hinting at the stock's solid prospects. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Pointer Telocation Ltd. Price and Consensus
This Zacks Rank #1 (Strong Buy) company coupled with a VGM Score of B has solid prospects and should make a valuable addition to your portfolio. Let us delve deeper into the other factors which make this stock a lucrative pick.
Earnings & Revenue Growth
Pointer Telocation makes a great pick in terms of growth investment. Arguably, nothing is more important than earnings growth as surging profit levels are often an indication of strong prospects.
For 2017, the company's earnings are estimated to grow 6.1% while sales growth is projected at 5.3%, higher than the industry's projected rate of 1.1%.
For all these reasons, the company currently has a Growth Score of B on our Style Score system that helps us identify potential outperformers.
Pointer Telocation has a Value Style Score of B, putting it in the top 40% of all stocks we cover from this perspective.
Looking at sales, the company currently trades at a Price-to-sales (P/S) ratio of 1.9, lower than the S&P 500 industry average of 3.2. Some prefer this metric over other value-focused ones because sales are harder to manipulate with accounting tricks than earnings.
The company currently has a trailing 12-months Price-to-Earnings (P/E) ratio of 17.2, while the sector's average stands at 22.5.
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. As this ratio doesn't take amortization and depreciation into account, it gives a true picture of the business' financial health. Pointer Telocation has a P/CF of 17.7, lower than its industry's average of 29.7.
All these ratios show that the company is undervalued in comparison to its industry peers and thus it is a good time to bet on the stock.
Superior Return on Equity
The Return on Equity delivered in the trailing 12 months is about 17%, while the industry returned 10.1%, reflecting the company's efficient usage of shareholders' funds.
Industry Outlook Positive
Currently, the Zacks Security and Safety Services industry ranks among the top 23% (60 out of 265 industries). Though the industry has underperformed the broader market in the last one year, a solid industry rank signals that the stock is likely to benefit from favorable broader market trends in the immediate future.
Other Key Picks
Other top-ranked stocks in the same space include ASSA ABLOY AB ASAZY , Allegion plc ALLE and Alarm.Com Holdings, Inc. ALRM . All three companies carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Full-year 2017 earnings for ASSA ABLOY will likely increase 18.3%.
Allegion's earnings are estimated to grow 12.7% in 2017.
Alarm.Com's earnings are expected to rise 49.4% in 2017.
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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.