Is Dana (DAN) 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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Dana (DAN). DAN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors should also note that DAN holds a PEG ratio of 1.31. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DAN's industry has an average PEG of 2.83 right now. Within the past year, DAN's PEG has been as high as 12.36 and as low as 0.62, with a median of 1.73.
Another valuation metric that we should highlight is DAN's P/B ratio of 1.87. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.41. Within the past 52 weeks, DAN's P/B has been as high as 2.12 and as low as 0.53, with a median of 1.18.
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. DAN has a P/S ratio of 0.5. This compares to its industry's average P/S of 0.96.
Finally, we should also recognize that DAN has a P/CF ratio of 8.78. 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 8.82. Over the past 52 weeks, DAN's P/CF has been as high as 9.96 and as low as 1.87, with a median of 4.33.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Dana is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DAN feels like a great value stock at the moment.
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