Is Danaos (DAC) 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Danaos (DAC). DAC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
Investors should also recognize that DAC has a P/B ratio of 0.24. 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 solid versus its industry's average P/B of 0.44. Within the past 52 weeks, DAC's P/B has been as high as 0.27 and as low as 0.08, with a median of 0.13.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DAC has a P/S ratio of 0.51. This compares to its industry's average P/S of 0.66.
These are only a few of the key metrics included in Danaos'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, DAC 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.