Is Seaspan (SSW) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 stock to keep an eye on is Seaspan (SSW). SSW is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.79. This compares to its industry's average Forward P/E of 14.52. SSW's Forward P/E has been as high as 10.16 and as low as 5.16, with a median of 8.42, all within the past year.
Investors should also recognize that SSW has a P/B ratio of 0.47. Investors use the P/B ratio to look at a stock's market value versus 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 0.86. Within the past 52 weeks, SSW's P/B has been as high as 0.63 and as low as 0.35, with a median of 0.48.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SSW has a P/S ratio of 1.08. This compares to its industry's average P/S of 1.09.
Finally, our model also underscores that SSW has a P/CF ratio of 3.02. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.76. SSW's P/CF has been as high as 3.25 and as low as 1.82, with a median of 2.71, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Seaspan is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SSW feels like a great value stock at the moment.