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Should Value Investors Buy Dana (DAN) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Dana (DAN - Free Report) . DAN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.20, while its industry has an average P/E of 18.87. Over the past year, DAN's Forward P/E has been as high as 12.48 and as low as 8.06, with a median of 10.09.

Investors should also note that DAN holds a PEG ratio of 0.89. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. DAN's industry currently sports an average PEG of 1.12. Over the last 12 months, DAN's PEG has been as high as 12.36 and as low as 0.88, with a median of 1.42.

Another valuation metric that we should highlight is DAN's P/B ratio of 1.82. Investors use the P/B ratio to look at a stock's market value versus 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 3.93. DAN's P/B has been as high as 2.17 and as low as 0.85, with a median of 1.56, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. DAN has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.9.

Finally, investors will want to recognize that DAN has a P/CF ratio of 8.32. 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. DAN's current P/CF looks attractive when compared to its industry's average P/CF of 21.71. Within the past 12 months, DAN's P/CF has been as high as 9.96 and as low as 2.89, with a median of 7.22.

Value investors will likely look at more than just these metrics, but the above data helps show that Dana is likely undervalued currently. And when considering the strength of its earnings outlook, DAN sticks out at as one of the market's strongest value stocks.


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