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Is Acco Brands (ACCO) Stock Undervalued Right Now?

Zacks Equity Research

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Acco Brands (ACCO). ACCO 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 7.38. This compares to its industry's average Forward P/E of 10.39. ACCO's Forward P/E has been as high as 8.81 and as low as 4.83, with a median of 6.84, all within the past year.

We also note that ACCO holds a PEG ratio of 1.05. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ACCO's PEG compares to its industry's average PEG of 1.37. ACCO's PEG has been as high as 1.07 and as low as 0.48, with a median of 0.68, all within the past year.

We should also highlight that ACCO has a P/B ratio of 1.19. 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 attractive against its industry's average P/B of 2.11. Over the past year, ACCO's P/B has been as high as 1.79 and as low as 0.86, with a median of 1.15.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ACCO has a P/S ratio of 0.48. This compares to its industry's average P/S of 1.26.

Finally, we should also recognize that ACCO has a P/CF ratio of 5.39. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.04. Within the past 12 months, ACCO's P/CF has been as high as 6.30 and as low as 3.05, with a median of 4.98.

These are only a few of the key metrics included in Acco Brands'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, ACCO looks like an impressive value stock at the moment.


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