Are Investors Undervaluing Fuel Tech (FTEK) 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Fuel Tech (FTEK) is a stock many investors are watching right now. FTEK is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that FTEK has a P/B ratio of 1.76. 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 4.61. Over the past 12 months, FTEK's P/B has been as high as 1.99 and as low as 0.69, with a median of 0.88.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FTEK has a P/S ratio of 0.72. This compares to its industry's average P/S of 1.05.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Fuel Tech is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FTEK feels like a great value stock at the moment.
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