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Is Ducommun (DCO) a Great Value Stock 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.

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 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.

Ducommun (DCO) is a stock many investors are watching right now. DCO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 15.47 right now. For comparison, its industry sports an average P/E of 20.13. Over the past year, DCO's Forward P/E has been as high as 37.70 and as low as 15.30, with a median of 17.88.

Another valuation metric that we should highlight is DCO's P/B ratio of 1.71. 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 company's current P/B looks solid when compared to its industry's average P/B of 4.99. Within the past 52 weeks, DCO's P/B has been as high as 2.26 and as low as 1.51, with a median of 1.80.

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. DCO has a P/S ratio of 0.7. This compares to its industry's average P/S of 1.85.

Finally, our model also underscores that DCO has a P/CF ratio of 10.14. 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 16.49. Over the past 52 weeks, DCO's P/CF has been as high as 15.79 and as low as 9.37, with a median of 11.58.

These are just a handful of the figures considered in Ducommun's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DCO is an impressive value stock right now.


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