Is PACCAR (PCAR) Stock Undervalued 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is PACCAR (PCAR). PCAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another valuation metric that we should highlight is PCAR's P/B ratio of 3.10. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. PCAR's current P/B looks attractive when compared to its industry's average P/B of 4.57. PCAR's P/B has been as high as 3.20 and as low as 2.58, with a median of 2.89, over the past year.
Finally, we should also recognize that PCAR has a P/CF ratio of 10. 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. PCAR's current P/CF looks attractive when compared to its industry's average P/CF of 18.15. 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 9.90.
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
