Are Investors Undervaluing PACCAR (PCAR) 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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is PACCAR (PCAR). PCAR is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 13.95, which compares to its industry's average of 29.18. PCAR's Forward P/E has been as high as 14 and as low as 9.44, with a median of 11.63, all within the past year.
PCAR is also sporting a PEG ratio of 1.77. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PCAR's PEG compares to its industry's average PEG of 2.64. Over the last 12 months, PCAR's PEG has been as high as 1.78 and as low as 0.94, with a median of 1.16.
Finally, investors should note that PCAR has a P/CF ratio of 11.03. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. PCAR's current P/CF looks attractive when compared to its industry's average P/CF of 14.23. Within the past 12 months, PCAR's P/CF has been as high as 11.24 and as low as 8.57, with a median of 9.87.
These figures are just a handful of the metrics value investors tend to look at, but they help show that PACCAR is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PCAR feels like a great value stock at the moment.
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PACCAR Inc. (PCAR) : Free Stock Analysis Report
