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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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 value investors might notice is PACCAR (PCAR - Free Report) . PCAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.75. This compares to its industry's average Forward P/E of 27.78. PCAR's Forward P/E has been as high as 13.22 and as low as 9.75, with a median of 11.54, all within the past year.
PCAR is also sporting a PEG ratio of 0.98. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PCAR's PEG compares to its industry's average PEG of 1.99. Over the past 52 weeks, PCAR's PEG has been as high as 1.32 and as low as 0.98, with a median of 1.15.
We should also highlight that PCAR has a P/B ratio of 2.65. The P/B ratio is used to compare a stock's market value with 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 3.27. Over the past 12 months, PCAR's P/B has been as high as 3.02 and as low as 2.20, with a median of 2.62.
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. PCAR has a P/S ratio of 1.21. This compares to its industry's average P/S of 2.32.
Finally, investors should note that PCAR has a P/CF ratio of 9.60. 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. PCAR's current P/CF looks attractive when compared to its industry's average P/CF of 14.65. Over the past year, PCAR's P/CF has been as high as 11.01 and as low as 8.57, with a median of 10.04.
These are only a few of the key metrics included in PACCAR'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, PCAR looks like an impressive value stock at the moment.
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Is PACCAR (PCAR) Stock Undervalued Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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 value investors might notice is PACCAR (PCAR - Free Report) . PCAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.75. This compares to its industry's average Forward P/E of 27.78. PCAR's Forward P/E has been as high as 13.22 and as low as 9.75, with a median of 11.54, all within the past year.
PCAR is also sporting a PEG ratio of 0.98. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PCAR's PEG compares to its industry's average PEG of 1.99. Over the past 52 weeks, PCAR's PEG has been as high as 1.32 and as low as 0.98, with a median of 1.15.
We should also highlight that PCAR has a P/B ratio of 2.65. The P/B ratio is used to compare a stock's market value with 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 3.27. Over the past 12 months, PCAR's P/B has been as high as 3.02 and as low as 2.20, with a median of 2.62.
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. PCAR has a P/S ratio of 1.21. This compares to its industry's average P/S of 2.32.
Finally, investors should note that PCAR has a P/CF ratio of 9.60. 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. PCAR's current P/CF looks attractive when compared to its industry's average P/CF of 14.65. Over the past year, PCAR's P/CF has been as high as 11.01 and as low as 8.57, with a median of 10.04.
These are only a few of the key metrics included in PACCAR'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, PCAR looks like an impressive value stock at the moment.