Should Value Investors Buy StealthGas (GASS) 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.
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 StealthGas (GASS). GASS 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 12.85, which compares to its industry's average of 16.98. Over the past year, GASS's Forward P/E has been as high as 35.46 and as low as 9.23, with a median of 14.26.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GASS has a P/S ratio of 0.78. This compares to its industry's average P/S of 1.16.
Finally, we should also recognize that GASS has a P/CF ratio of 4.33. 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. GASS's P/CF compares to its industry's average P/CF of 10.21. Over the past 52 weeks, GASS's P/CF has been as high as 5.27 and as low as 3.12, with a median of 4.33.
These are only a few of the key metrics included in StealthGas'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, GASS 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.