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Is Commercial Vehicle a Great Stock for Value Investors?
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Commercial Vehicle Group, Inc. (CVGI - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Commercial Vehicle has a trailing twelve months PE ratio of 18.4, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.1x. If we focus on the long-term PE trend, Commercial Vehicle’s current PE level puts it above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also compares favorably with its industry’s trailing twelve months PE ratio, which stands at 13.4. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Commercial Vehicle has a forward PE ratio (price relative to this year’s earnings) of just 6.9, so it is fair to say that a slightly more value-oriented path may be ahead for Commercial Vehicle stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Commercial Vehicle has a P/S ratio of about 0.3. This is a bit lower than the S&P 500 average, which comes in at 3.2x right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, CVGI is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Commercial Vehicle currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Commercial Vehicle a solid choice for value investors.
What About the Stock Overall?
Though Commercial Vehicle might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of A and a Momentum Score of D. This gives CVGI a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been downbeat. Both the current quarter and full year have seen one estimates moving down compared to no movement in the opposite direction.
This has had a significant impact on the consensus estimate though as the current quarter consensus estimate has decreased by 41.6% in the past two months, while the full year estimate has inched lower by 3.2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Commercial Vehicle Group, Inc. Price and Consensus
Notably, the stock holds a Zacks Rank #3 (Hold). Thus, we are looking for in-line performance from the company in the near term.
BottomLine
Commercial Vehicle is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Further, a strong industry rank (among Bottom Top 28% of more than 250 industries) instills our confidence.
In fact, over the past two years, the broader industry has clearly underperformed the market at large, as you can see below:
However, with a Zacks Rank #3 it is hard to get too excited about this company overall. So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
5 Medical Stocks to Buy Now
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New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Is Commercial Vehicle a Great Stock for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Commercial Vehicle Group, Inc. (CVGI - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Commercial Vehicle has a trailing twelve months PE ratio of 18.4, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.1x. If we focus on the long-term PE trend, Commercial Vehicle’s current PE level puts it above its midpoint over the past five years, with the number having risen rapidly over the past few months.
Further, the stock’s PE also compares favorably with its industry’s trailing twelve months PE ratio, which stands at 13.4. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Commercial Vehicle has a forward PE ratio (price relative to this year’s earnings) of just 6.9, so it is fair to say that a slightly more value-oriented path may be ahead for Commercial Vehicle stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Commercial Vehicle has a P/S ratio of about 0.3. This is a bit lower than the S&P 500 average, which comes in at 3.2x right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, CVGI is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Commercial Vehicle currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Commercial Vehicle a solid choice for value investors.
What About the Stock Overall?
Though Commercial Vehicle might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of A and a Momentum Score of D. This gives CVGI a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been downbeat. Both the current quarter and full year have seen one estimates moving down compared to no movement in the opposite direction.
This has had a significant impact on the consensus estimate though as the current quarter consensus estimate has decreased by 41.6% in the past two months, while the full year estimate has inched lower by 3.2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Commercial Vehicle Group, Inc. Price and Consensus
Commercial Vehicle Group, Inc. Price and Consensus | Commercial Vehicle Group, Inc. Quote
Notably, the stock holds a Zacks Rank #3 (Hold). Thus, we are looking for in-line performance from the company in the near term.
BottomLine
Commercial Vehicle is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Further, a strong industry rank (among Bottom Top 28% of more than 250 industries) instills our confidence.
In fact, over the past two years, the broader industry has clearly underperformed the market at large, as you can see below:
However, with a Zacks Rank #3 it is hard to get too excited about this company overall. So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>