Are Investors Undervaluing Huntington Ingalls (HII) Right Now?
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Huntington Ingalls (HII) is a stock many investors are watching right now. HII is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 16.08. This compares to its industry's average Forward P/E of 22.04. Over the last 12 months, HII's Forward P/E has been as high as 16.41 and as low as 9.49, with a median of 11.99.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HII has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.36.
Finally, we should also recognize that HII has a P/CF ratio of 8.79. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 20.36. Over the past year, HII's P/CF has been as high as 9.66 and as low as 6.52, with a median of 7.98.
These are just a handful of the figures considered in Huntington Ingalls'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 HII is an impressive value stock right now.
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