Are Investors Undervaluing Leggett & Platt (LEG) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Leggett & Platt (LEG) is a stock many investors are watching right now. LEG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Investors should also recognize that LEG has a P/B ratio of 1.91. 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. LEG's current P/B looks attractive when compared to its industry's average P/B of 3.42. Over the past 12 months, LEG's P/B has been as high as 3.07 and as low as 1.83, with a median of 2.33.
Finally, investors should note that LEG has a P/CF ratio of 8.12. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. LEG's P/CF compares to its industry's average P/CF of 11.05. LEG's P/CF has been as high as 10.57 and as low as 7.82, with a median of 9.20, all within the past year.
Another great Furniture stock you could consider is Virco Manufacturing (VIRC), which is a # 1 (Strong Buy) stock with a Value Score of A.
Virco Manufacturing sports a P/B ratio of 2.06 as well; this compares to its industry's price-to-book ratio of 3.42. In the past 52 weeks, VIRC's P/B has been as high as 2.22, as low as 0.86, with a median of 1.05.
These are only a few of the key metrics included in Leggett & Platt and Virco Manufacturing strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, LEG and VIRC look like an impressive value stock at the moment.
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Leggett & Platt, Incorporated (LEG) : Free Stock Analysis Report
Virco Manufacturing Corporation (VIRC) : Free Stock Analysis Report
