Is PACCAR (PCAR) a Great Value Stock 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, 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 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 company value investors might notice is PACCAR (PCAR). PCAR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 13.05 right now. For comparison, its industry sports an average P/E of 24.44. PCAR's Forward P/E has been as high as 14.09 and as low as 10.39, with a median of 11.75, all within the past year.
We also note that PCAR holds a PEG ratio of 1.31. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PCAR's PEG compares to its industry's average PEG of 1.36. Within the past year, PCAR's PEG has been as high as 1.41 and as low as 1.04, with a median of 1.18.
Investors should also recognize that PCAR has a P/B ratio of 2.99. The P/B ratio pits a stock's market value against 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 3.18. Within the past 52 weeks, PCAR's P/B has been as high as 3 and as low as 2.20, with a median of 2.53.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PCAR has a P/S ratio of 1.35. This compares to its industry's average P/S of 2.94.
These are only a few of the key metrics included in PACCAR'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, PCAR looks like an impressive value stock at the moment.
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