Back to top

Image: Bigstock

Should Value Investors Buy Norwegian Cruise Line (NCLH) Stock?

Read MoreHide Full Article

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.

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 company value investors might notice is Norwegian Cruise Line (NCLH - Free Report) . NCLH 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 13.54. This compares to its industry's average Forward P/E of 21.10. Over the last 12 months, NCLH's Forward P/E has been as high as 26.42 and as low as 9.06, with a median of 12.97.

Finally, we should also recognize that NCLH has a P/CF ratio of 9.38. 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. NCLH's current P/CF looks attractive when compared to its industry's average P/CF of 17.56. Over the past year, NCLH's P/CF has been as high as 16.32 and as low as 5.32, with a median of 7.05.

These are just a handful of the figures considered in Norwegian Cruise Line's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that NCLH is an impressive value stock right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Norwegian Cruise Line Holdings Ltd. (NCLH) - free report >>

Published in