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Are Investors Undervaluing Hawkins (HWKN) Right Now?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Hawkins (HWKN - Free Report) . HWKN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 16.65, while its industry has an average P/E of 17.66. Over the last 12 months, HWKN's Forward P/E has been as high as 20.27 and as low as 13.78, with a median of 16.36.

We should also highlight that HWKN has a P/B ratio of 2.76. 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 attractive against its industry's average P/B of 7.56. Over the past year, HWKN's P/B has been as high as 3.21 and as low as 2.07, with a median of 2.70.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. HWKN has a P/S ratio of 1.15. This compares to its industry's average P/S of 1.79.

These are only a few of the key metrics included in Hawkins's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HWKN looks like an impressive value stock at the moment.


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