Is Brother Industries Ltd. (BRTHY) a Great Value Stock Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Brother Industries Ltd. (BRTHY). BRTHY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 13.38 right now. For comparison, its industry sports an average P/E of 19.42. Over the past 52 weeks, BRTHY's Forward P/E has been as high as 15.27 and as low as 2.27, with a median of 13.09.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BRTHY has a P/S ratio of 1.04. This compares to its industry's average P/S of 1.73.
Finally, our model also underscores that BRTHY has a P/CF ratio of 6.77. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. BRTHY's P/CF compares to its industry's average P/CF of 26.33. Over the past year, BRTHY's P/CF has been as high as 6.94 and as low as 4.20, with a median of 5.94.
Value investors will likely look at more than just these metrics, but the above data helps show that Brother Industries Ltd. Is likely undervalued currently. And when considering the strength of its earnings outlook, BRTHY sticks out at as one of the market's strongest value stocks.
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