Are Investors Undervaluing Masonite International (DOOR) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Masonite International (DOOR). DOOR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.88 right now. For comparison, its industry sports an average P/E of 14.59. Over the past 52 weeks, DOOR's Forward P/E has been as high as 14.28 and as low as 6.56, with a median of 10.79.
We should also highlight that DOOR has a P/B ratio of 3.14. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.27. Within the past 52 weeks, DOOR's P/B has been as high as 4.17 and as low as 2.58, with a median of 3.46.
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. DOOR has a P/S ratio of 0.74. This compares to its industry's average P/S of 1.63.
Finally, we should also recognize that DOOR has a P/CF ratio of 9.91. 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. DOOR's P/CF compares to its industry's average P/CF of 10.24. Over the past 52 weeks, DOOR's P/CF has been as high as 17.07 and as low as 8.14, with a median of 11.75.
These are just a handful of the figures considered in Masonite International'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 DOOR is an impressive value stock right now.
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