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Are Investors Undervaluing Griffon (GFF) Right Now?

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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Griffon (GFF). GFF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 14.07 right now. For comparison, its industry sports an average P/E of 30.95. GFF's Forward P/E has been as high as 24.03 and as low as 6.43, with a median of 13.92, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GFF has a P/S ratio of 0.54. This compares to its industry's average P/S of 1.59.

Finally, investors should note that GFF has a P/CF ratio of 9.09. 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. This stock's P/CF looks attractive against its industry's average P/CF of 30.84. Over the past 52 weeks, GFF's P/CF has been as high as 9.97 and as low as 3.93, with a median of 7.89.

These are only a few of the key metrics included in Griffon's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GFF looks like an impressive value stock at the moment.


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