Firstgroup (LON:FGP) is a mid cap bus and train operator that has, for a long time, been one of those turnarounds that can't quite turnaround. Over the past month, however, its share price has shown signs of life:
And this positive momentum is driving an improvement in Firstgroup's StockRank, which now sits at 87. Alongside momentum, two other factors contribute to our StockRanks: value and quality. Here, we take a quick look at Firstgroup's Value Rank to see what this indicator says about the group's shares.
The Value Rank: how does Firstgroup stack up?
We can see by using Firstgroup’s StockReport that it has a:
- Rolling price to book value of 0.82,
- Rolling price to earnings ratio of 8.58
- Trailing twelve-month price to free cash flow of 8.93
- Rolling dividend yield of 0.000%
- Trailing twelve-month price to sales ratio of 0.20
When we add all of these together, we find that Firstgroup has a Value Rank of 75. Investing in high-value stocks requires finesse and a sturdy constitution but, when cheap stocks come good, the payoff can be large and sudden.
Firstgroup’s Value Rank of 75 puts it in the cheapest quartile of the stock market. That is certainly a promising jumping off point for our analysis but it is not the whole story.
A smarter way to invest in value stocks is to find the best quality value stocks or value stocks whose share prices are turning around - history shows that you can do much better than a passive investor by combining factors, so it makes sense to consider Firstgroup’s Value Rank alongside its Momentum and Quality Ranks. You can see these Ranks on the group's StockReport page.
Disclaimer: These articles are provided for information purposes only. The content is not intended to be a personal recommendation. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. The author has no position in the stocks mentioned, unless otherwise stated.