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Are Investors Undervaluing Emcor Group (EME) Right Now?

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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 value investors might notice is Emcor Group (EME). EME is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 10.07, which compares to its industry's average of 13.40. Over the past year, EME's Forward P/E has been as high as 15.86 and as low as 8.02, with a median of 14.68.

Investors should also note that EME holds a PEG ratio of 0.98. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EME's PEG compares to its industry's average PEG of 1.68. Over the last 12 months, EME's PEG has been as high as 1.06 and as low as 0.96, with a median of 1.

Another valuation metric that we should highlight is EME's P/B ratio of 1.67. 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 stock's P/B looks solid versus its industry's average P/B of 1.80. EME's P/B has been as high as 2.73 and as low as 1.32, with a median of 2.48, over the past year.

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


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