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Are Investors Undervaluing Strattec Security (STRT) Right Now?

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Zacks Equity Research
·2 min read
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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, 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.

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.

One stock to keep an eye on is Strattec Security (STRT). STRT is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Another notable valuation metric for STRT is its P/B ratio of 1.03. 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. This stock's P/B looks attractive against its industry's average P/B of 2.41. Over the past year, STRT's P/B has been as high as 1.09 and as low as 0.24, with a median of 0.45.

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. STRT has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.7.

These are only a few of the key metrics included in Strattec Security's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, STRT looks like an impressive value stock at the moment.


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Zacks Investment Research