Is Covenant Transportation (CVTI) a Great Value Stock 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One company to watch right now is Covenant Transportation (CVTI). CVTI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.82 right now. For comparison, its industry sports an average P/E of 16.98. Over the last 12 months, CVTI's Forward P/E has been as high as 31.88 and as low as 11.82, with a median of 16.13.

Investors should also recognize that CVTI has a P/B ratio of 1.75. 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 stock's P/B looks attractive against its industry's average P/B of 2.67. Over the past 12 months, CVTI's P/B has been as high as 2.24 and as low as 1.58, with a median of 1.86.

Finally, investors will want to recognize that CVTI has a P/CF ratio of 3.78. 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. CVTI's P/CF compares to its industry's average P/CF of 10.11. Within the past 12 months, CVTI's P/CF has been as high as 6.35 and as low as 3.64, with a median of 4.27.

These are only a few of the key metrics included in Covenant Transportation'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, CVTI 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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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