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Is DXP Enterprises (DXPE) Stock Undervalued Right Now?
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.
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 DXP Enterprises (DXPE - Free Report) . DXPE is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 13.58. This compares to its industry's average Forward P/E of 21.69. DXPE's Forward P/E has been as high as 17.28 and as low as 7.02, with a median of 9.31, all within the past year.
Investors should also recognize that DXPE has a P/B ratio of 2.13. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. DXPE's current P/B looks attractive when compared to its industry's average P/B of 5.52. Over the past year, DXPE's P/B has been as high as 2.40 and as low as 1.10, with a median of 1.55.
Finally, investors will want to recognize that DXPE has a P/CF ratio of 8.37. 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 23.29. DXPE's P/CF has been as high as 9.43 and as low as 5.18, with a median of 6.62, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that DXP Enterprises is likely undervalued currently. And when considering the strength of its earnings outlook, DXPE sticks out at as one of the market's strongest value stocks.