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Are Investors Undervaluing American Woodmark (AMWD) Right Now?

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Zacks Equity Research
·3 min read
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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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 company to watch right now is American Woodmark (AMWD). AMWD is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 12.97. This compares to its industry's average Forward P/E of 14.54. Over the last 12 months, AMWD's Forward P/E has been as high as 20.29 and as low as 4.56, with a median of 13.36.

AMWD is also sporting a PEG ratio of 0.74. 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. AMWD's PEG compares to its industry's average PEG of 1.07. AMWD's PEG has been as high as 1.58 and as low as 0.51, with a median of 1.47, all within the past year.

We should also highlight that AMWD has a P/B ratio of 2.17. The P/B ratio pits a stock's market value against 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 3.16. Over the past year, AMWD's P/B has been as high as 2.88 and as low as 0.88, with a median of 1.99.

Finally, our model also underscores that AMWD has a P/CF ratio of 8.94. 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. AMWD's current P/CF looks attractive when compared to its industry's average P/CF of 9.37. AMWD's P/CF has been as high as 10.74 and as low as 3.31, with a median of 7.65, all within the past year.

These are just a handful of the figures considered in American Woodmark'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 AMWD is an impressive value stock right now.


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