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Is Escalade (ESCA) Stock Undervalued Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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, 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Escalade (ESCA). ESCA 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 12.67 right now. For comparison, its industry sports an average P/E of 13.69. Over the last 12 months, ESCA's Forward P/E has been as high as 17.82 and as low as 11.62, with a median of 14.60.

Another valuation metric that we should highlight is ESCA's P/B ratio of 1.30. 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 solid versus its industry's average P/B of 3.48. Within the past 52 weeks, ESCA's P/B has been as high as 1.97 and as low as 1.27, with a median of 1.63.

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. ESCA has a P/S ratio of 0.93. This compares to its industry's average P/S of 1.25.

Finally, investors should note that ESCA has a P/CF ratio of 5.86. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.68. ESCA's P/CF has been as high as 13.73 and as low as 5.74, with a median of 10.06, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Escalade is likely undervalued currently. And when considering the strength of its earnings outlook, ESCA sticks out at as one of the market's strongest value stocks.


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