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Should Value Investors Buy Diana Shipping (DSX) Stock?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Diana Shipping (DSX) is a stock many investors are watching right now. DSX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

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We should also highlight that DSX has a P/B ratio of 0.67. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.42. Within the past 52 weeks, DSX's P/B has been as high as 0.90 and as low as 0.63, with a median of 0.75.

Finally, our model also underscores that DSX has a P/CF ratio of 2.99. 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. DSX's current P/CF looks attractive when compared to its industry's average P/CF of 7.46. Over the past 52 weeks, DSX's P/CF has been as high as 3.30 and as low as 2.14, with a median of 2.78.

Value investors will likely look at more than just these metrics, but the above data helps show that Diana Shipping is likely undervalued currently. And when considering the strength of its earnings outlook, DSX sticks out at as one of the market's strongest value stocks.

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