Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Horizon Global Corporation stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Horizon Global has a trailing twelve months PE ratio of 8.8, as you can see in the chart below:
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/hzn_pe_20180329.jpg)
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.2. If we focus on the long-term PE trend, Horizon Global’s current PE level puts it below its midpoint over the past two years.
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/hzn_pevssnp_20180329.jpg)
Further, the stock’s PE also compares favorably with the Zacks Automotive - Original Equipment industry’s trailing twelve months PE ratio, which stands at 13.5. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/hzn_pevssubin_20180329.jpg)
We should also point out that Horizon Global has a forward PE ratio (price relative to this year’s earnings) of 8, so it is fair to say that a slightly more value-oriented path may be ahead for Horizon Global stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Horizon Global has a P/S ratio of about 0.2. This is a bit lower than the S&P 500 average, which comes in at 3.2x right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/hzn_psvssnp_20180329.jpg)
If anything, HZN is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Horizon Global currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Horizon Global a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at 3.6, which is far better than the industry average of 7.9. Clearly, HZN is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Horizon Global might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of A and a Momentum Score of F. This gives HZN a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty discouraging. The current quarter has seen no estimates go higher in the past sixty days compared to three lower, while the full year estimate has seen one up and three down in the same time period.
This has had a significant impact on the consensus estimate though as the current quarter consensus estimate has fallen from a loss of 1 cent to a loss of 9 cents in the past two months, while the full year estimate has gone down by 6.2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Horizon Global Corporation Price and Consensus
This bearish trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Horizon Global is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 20% out of more than 250 industries) further strengthens its growth potential. In fact, over the past two years, the industry has clearly outperformed the broader market, as you can see below:
![](https://staticx-tuner.zacks.com/images/zadmin_tuner_image/hzn_bottomline_20180329.jpg)
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
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Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
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Image: Bigstock
Is Horizon Global (HZN) a Great Stock for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Horizon Global Corporation stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Horizon Global has a trailing twelve months PE ratio of 8.8, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.2. If we focus on the long-term PE trend, Horizon Global’s current PE level puts it below its midpoint over the past two years.
Further, the stock’s PE also compares favorably with the Zacks Automotive - Original Equipment industry’s trailing twelve months PE ratio, which stands at 13.5. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Horizon Global has a forward PE ratio (price relative to this year’s earnings) of 8, so it is fair to say that a slightly more value-oriented path may be ahead for Horizon Global stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Horizon Global has a P/S ratio of about 0.2. This is a bit lower than the S&P 500 average, which comes in at 3.2x right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, HZN is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Horizon Global currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Horizon Global a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at 3.6, which is far better than the industry average of 7.9. Clearly, HZN is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Horizon Global might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of A and a Momentum Score of F. This gives HZN a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been pretty discouraging. The current quarter has seen no estimates go higher in the past sixty days compared to three lower, while the full year estimate has seen one up and three down in the same time period.
This has had a significant impact on the consensus estimate though as the current quarter consensus estimate has fallen from a loss of 1 cent to a loss of 9 cents in the past two months, while the full year estimate has gone down by 6.2%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Horizon Global Corporation Price and Consensus
Horizon Global Corporation Price and Consensus | Horizon Global Corporation Quote
This bearish trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Horizon Global is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 20% out of more than 250 industries) further strengthens its growth potential. In fact, over the past two years, the industry has clearly outperformed the broader market, as you can see below:
So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>