Should Value Investors Buy Gatx (GATX) Stock?
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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Gatx (GATX). GATX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Investors should also note that GATX holds a PEG ratio of 1.04. 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. GATX's PEG compares to its industry's average PEG of 1.17. Over the last 12 months, GATX's PEG has been as high as 1.11 and as low as 0.89, with a median of 1.
Finally, investors will want to recognize that GATX has a P/CF ratio of 5.36. 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. GATX's P/CF compares to its industry's average P/CF of 7.70. Over the past 52 weeks, GATX's P/CF has been as high as 5.71 and as low as 3.13, with a median of 5.19.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Gatx is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GATX feels like a great value stock at the moment.
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