Should Value Investors Buy Seaspan (SSW) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Seaspan (SSW) is a stock many investors are watching right now. SSW is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.12, which compares to its industry's average of 14.10. Over the past 52 weeks, SSW's Forward P/E has been as high as 10.16 and as low as 5.16, with a median of 8.33.
Investors should also recognize that SSW has a P/B ratio of 0.43. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 0.80. Over the past year, 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 love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SSW has a P/S ratio of 0.95. This compares to its industry's average P/S of 1.07.
Finally, we should also recognize that SSW has a P/CF ratio of 2.76. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 9.90. Over the past year, SSW's P/CF has been as high as 6.75 and as low as 1.82, with a median of 2.71.
Value investors will likely look at more than just these metrics, but the above data helps show that Seaspan is likely undervalued currently. And when considering the strength of its earnings outlook, SSW sticks out at as one of the market's strongest value stocks.