Is ArcBest (ARCB) Stock Undervalued 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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.
One company to watch right now is ArcBest (ARCB). ARCB is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.40, which compares to its industry's average of 24.55. ARCB's Forward P/E has been as high as 19.34 and as low as 6.45, with a median of 11.07, all within the past year.
ARCB is also sporting a PEG ratio of 1.25. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ARCB's industry has an average PEG of 2.11 right now. ARCB's PEG has been as high as 2.19 and as low as 0.92, with a median of 1.50, all within the past year.
Investors should also recognize that ARCB has a P/B ratio of 1.11. 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. ARCB's current P/B looks attractive when compared to its industry's average P/B of 3.05. Within the past 52 weeks, ARCB's P/B has been as high as 1.17 and as low as 0.54, with a median of 0.91.
Finally, we should also recognize that ARCB has a P/CF ratio of 6.09. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ARCB's P/CF compares to its industry's average P/CF of 14.67. ARCB's P/CF has been as high as 6.47 and as low as 2.78, with a median of 4.39, all within the past year.
These are only a few of the key metrics included in ArcBest's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ARCB looks like an impressive value stock at the moment.
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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.