Is Huntington Ingalls (HII) 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.
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.
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 stock to keep an eye on is Huntington Ingalls (HII). HII is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 14.38 right now. For comparison, its industry sports an average P/E of 18.62. HII's Forward P/E has been as high as 21.31 and as low as 11.87, with a median of 15.21, all within the past year.
HII is also sporting a PEG ratio of 0.96. 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. HII's PEG compares to its industry's average PEG of 1.58. Over the past 52 weeks, HII's PEG has been as high as 1.42 and as low as 0.79, with a median of 1.01.
Finally, investors will want to recognize that HII has a P/CF ratio of 13.35. 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. HII's current P/CF looks attractive when compared to its industry's average P/CF of 14.74. Within the past 12 months, HII's P/CF has been as high as 17.82 and as low as 11.73, with a median of 13.37.
Value investors will likely look at more than just these metrics, but the above data helps show that Huntington Ingalls is likely undervalued currently. And when considering the strength of its earnings outlook, HII sticks out at as one of the market's strongest value stocks.
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