Are Investors Undervaluing AZZ (AZZ) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is AZZ (AZZ). AZZ is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 13.46 right now. For comparison, its industry sports an average P/E of 22.57. Over the past 52 weeks, AZZ's Forward P/E has been as high as 13.64 and as low as 9.48, with a median of 11.32.
AZZ is also sporting a PEG ratio of 0.96. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AZZ's industry has an average PEG of 2 right now. Over the past 52 weeks, AZZ's PEG has been as high as 0.97 and as low as 0.89, with a median of 0.92.
Another notable valuation metric for AZZ is its P/B ratio of 1.71. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.11. Over the past 12 months, AZZ's P/B has been as high as 1.71 and as low as 1, with a median of 1.26.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AZZ has a P/S ratio of 1.06. This compares to its industry's average P/S of 2.55.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AZZ is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AZZ feels like a great value stock at the moment.
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AZZ Inc. (AZZ) : Free Stock Analysis Report
