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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 to watch right now is Patrick Industries (PATK). PATK is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 13.62, while its industry has an average P/E of 18.46. PATK's Forward P/E has been as high as 24.07 and as low as 4.43, with a median of 12.33, all within the past year.
Investors should also note that PATK holds a PEG ratio of 1.50. 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. PATK's industry has an average PEG of 1.61 right now. Within the past year, PATK's PEG has been as high as 10.81 and as low as 0.64, with a median of 1.71.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PATK has a P/S ratio of 0.62. This compares to its industry's average P/S of 1.32.
Finally, we should also recognize that PATK has a P/CF ratio of 9.92. 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. PATK's current P/CF looks attractive when compared to its industry's average P/CF of 16.63. PATK's P/CF has been as high as 11.61 and as low as 2.83, with a median of 7.37, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Patrick Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PATK feels like a great value stock at the moment.
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