Markets

KNX vs. LSTR: Which Stock Should Value Investors Buy Now?

Investors interested in Transportation - Truck stocks are likely familiar with Knight-Swift Transportation Holdings (KNX) and Landstar System (LSTR). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, both Knight-Swift Transportation Holdings and Landstar System are holding a Zacks Rank of # 1 (Strong Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

KNX currently has a forward P/E ratio of 19.17, while LSTR has a forward P/E of 31.13. We also note that KNX has a PEG ratio of 1.28. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LSTR currently has a PEG ratio of 2.59.

Another notable valuation metric for KNX is its P/B ratio of 1.24. 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. By comparison, LSTR has a P/B of 7.55.

Based on these metrics and many more, KNX holds a Value grade of B, while LSTR has a Value grade of C.

Both KNX and LSTR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KNX is the superior value option right now.


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KnightSwift Transportation Holdings Inc. (KNX): Free Stock Analysis Report

Landstar System, Inc. (LSTR): Free Stock Analysis Report

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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.

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