Should Value Investors Buy Star Bulk Carriers (SBLK) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Star Bulk Carriers (SBLK). SBLK is currently sporting a Zacks Rank #2 (Buy) and an A for Value.

Another valuation metric that we should highlight is SBLK's P/B ratio of 0.96. 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 solid versus its industry's average P/B of 2.34. Over the past 12 months, SBLK's P/B has been as high as 0.97 and as low as 0.49, with a median of 0.75.

Finally, our model also underscores that SBLK has a P/CF ratio of 7.71. 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. SBLK's P/CF compares to its industry's average P/CF of 8.23. Within the past 12 months, SBLK's P/CF has been as high as 7.76 and as low as 3.62, with a median of 4.74.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Star Bulk Carriers is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SBLK feels like a great value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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