Investors with an interest in Transportation - Truck stocks have likely encountered both Knight-Swift Transportation Holdings (KNX) and Saia (SAIA). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Knight-Swift Transportation Holdings has a Zacks Rank of #2 (Buy), while Saia has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that KNX is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
KNX currently has a forward P/E ratio of 37.12, while SAIA has a forward P/E of 37.35. We also note that KNX has a PEG ratio of 1.01. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SAIA currently has a PEG ratio of 2.03.
Another notable valuation metric for KNX is its P/B ratio of 1.68. 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. For comparison, SAIA has a P/B of 4.32.
These are just a few of the metrics contributing to KNX's Value grade of B and SAIA's Value grade of D.
KNX stands above SAIA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KNX is the superior value option right now.
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Knight-Swift Transportation Holdings Inc. (KNX): Free Stock Analysis Report
Saia, Inc. (SAIA): Free Stock Analysis Report