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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is PACCAR (PCAR - Free Report) . PCAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Investors will also notice that PCAR has a PEG ratio of 1.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PCAR's industry has an average PEG of 2.75 right now. Over the last 12 months, PCAR's PEG has been as high as 1.32 and as low as 0.94, with a median of 1.15.
Another valuation metric that we should highlight is PCAR's P/B ratio of 2.87. The P/B is a method of comparing a stock's market value to 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 4.98. PCAR's P/B has been as high as 3.11 and as low as 2.26, with a median of 2.77, 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. PCAR has a P/S ratio of 1.33. This compares to its industry's average P/S of 2.09.
Finally, investors will want to recognize that PCAR has a P/CF ratio of 9.67. 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. PCAR's current P/CF looks attractive when compared to its industry's average P/CF of 19.62. Within the past 12 months, PCAR's P/CF has been as high as 11.24 and as low as 8.57, with a median of 9.97.
Value investors will likely look at more than just these metrics, but the above data helps show that PACCAR is likely undervalued currently. And when considering the strength of its earnings outlook, PCAR sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy PACCAR (PCAR) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is PACCAR (PCAR - Free Report) . PCAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Investors will also notice that PCAR has a PEG ratio of 1.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PCAR's industry has an average PEG of 2.75 right now. Over the last 12 months, PCAR's PEG has been as high as 1.32 and as low as 0.94, with a median of 1.15.
Another valuation metric that we should highlight is PCAR's P/B ratio of 2.87. The P/B is a method of comparing a stock's market value to 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 4.98. PCAR's P/B has been as high as 3.11 and as low as 2.26, with a median of 2.77, 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. PCAR has a P/S ratio of 1.33. This compares to its industry's average P/S of 2.09.
Finally, investors will want to recognize that PCAR has a P/CF ratio of 9.67. 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. PCAR's current P/CF looks attractive when compared to its industry's average P/CF of 19.62. Within the past 12 months, PCAR's P/CF has been as high as 11.24 and as low as 8.57, with a median of 9.97.
Value investors will likely look at more than just these metrics, but the above data helps show that PACCAR is likely undervalued currently. And when considering the strength of its earnings outlook, PCAR sticks out at as one of the market's strongest value stocks.