Advertisement
Singapore markets closed
  • Straits Times Index

    3,497.78
    +22.72 (+0.65%)
     
  • Nikkei

    41,190.68
    -1,033.34 (-2.45%)
     
  • Hang Seng

    18,293.38
    +461.05 (+2.59%)
     
  • FTSE 100

    8,252.91
    +29.57 (+0.36%)
     
  • Bitcoin USD

    59,696.88
    +839.12 (+1.43%)
     
  • CMC Crypto 200

    1,245.59
    +47.02 (+3.92%)
     
  • S&P 500

    5,615.35
    +30.81 (+0.55%)
     
  • Dow

    40,000.90
    +247.15 (+0.62%)
     
  • Nasdaq

    18,398.45
    +115.04 (+0.63%)
     
  • Gold

    2,416.00
    -5.90 (-0.24%)
     
  • Crude Oil

    82.18
    -0.44 (-0.53%)
     
  • 10-Yr Bond

    4.1890
    -0.0040 (-0.10%)
     
  • FTSE Bursa Malaysia

    1,619.06
    -4.06 (-0.25%)
     
  • Jakarta Composite Index

    7,327.58
    +27.17 (+0.37%)
     
  • PSE Index

    6,648.23
    +38.99 (+0.59%)
     

Should Value Investors Buy Danaos (DAC) Stock?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One stock to keep an eye on is Danaos (DAC). DAC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 2.23. This compares to its industry's average Forward P/E of 4.55. Over the past year, DAC's Forward P/E has been as high as 3.58 and as low as 1.88, with a median of 2.48.

ADVERTISEMENT

Another notable valuation metric for DAC is its P/B ratio of 0.50. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. DAC's current P/B looks attractive when compared to its industry's average P/B of 1.08. DAC's P/B has been as high as 1.06 and as low as 0.44, with a median of 0.59, over the past year.

Finally, our model also underscores that DAC has a P/CF ratio of 1.75. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 2.86. Within the past 12 months, DAC's P/CF has been as high as 1.96 and as low as 1.07, with a median of 1.65.

If you're looking for another solid Transportation - Shipping value stock, take a look at Safe Bulkers (SB). SB is a # 1 (Strong Buy) stock with a Value score of A.

Additionally, Safe Bulkers has a P/B ratio of 0.51 while its industry's price-to-book ratio sits at 1.08. For SB, this valuation metric has been as high as 0.87, as low as 0.40, with a median of 0.63 over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Danaos and Safe Bulkers are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DAC and SB feels like a great value stock at the moment.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Danaos Corporation (DAC) : Free Stock Analysis Report

Safe Bulkers, Inc (SB) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research