Are Investors Undervaluing H&E Equipment (HEES) Right Now?

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

H&E Equipment (HEES) is a stock many investors are watching right now. HEES is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Another valuation metric that we should highlight is HEES's P/B ratio of 3.86. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. HEES's current P/B looks attractive when compared to its industry's average P/B of 4.07. Over the past 12 months, HEES's P/B has been as high as 6.45 and as low as 2.74, with a median of 3.83.

Finally, investors will want to recognize that HEES has a P/CF ratio of 3.07. 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. This stock's P/CF looks attractive against its industry's average P/CF of 7.05. Over the past year, HEES's P/CF has been as high as 4.49 and as low as 1.83, with a median of 3.09.

These are only a few of the key metrics included in H&E Equipment'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, HEES looks like an impressive value stock at the moment.