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Is Brother Industries (BRTHY) a Great Value Stock Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 to watch right now is Brother Industries (BRTHY - Free Report) . BRTHY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 10.23, which compares to its industry's average of 12. Over the last 12 months, BRTHY's Forward P/E has been as high as 12.98 and as low as 9.52, with a median of 11.32.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BRTHY has a P/S ratio of 0.77. This compares to its industry's average P/S of 0.87.

Finally, we should also recognize that BRTHY has a P/CF ratio of 7.89. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.68. Over the past 52 weeks, BRTHY's P/CF has been as high as 9.13 and as low as 6.81, with a median of 8.10.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Brother Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BRTHY feels like a great value stock at the moment.


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