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Should Value Investors Buy Enersys (ENS) Stock?

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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.

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 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 value investors might notice is Enersys (ENS - Free Report) . ENS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.49, which compares to its industry's average of 22.55. Over the past year, ENS's Forward P/E has been as high as 12.63 and as low as 9.92, with a median of 11.07.

Another notable valuation metric for ENS is its P/B ratio of 2.19. 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 3.93. ENS's P/B has been as high as 2.56 and as low as 2.05, with a median of 2.25, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ENS has a P/S ratio of 1.14. This compares to its industry's average P/S of 3.05.

Finally, our model also underscores that ENS has a P/CF ratio of 11.06. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 31. Over the past 52 weeks, ENS's P/CF has been as high as 14.50 and as low as 9.90, with a median of 11.10.

Value investors will likely look at more than just these metrics, but the above data helps show that Enersys is likely undervalued currently. And when considering the strength of its earnings outlook, ENS sticks out at as one of the market's strongest value stocks.


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