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Is Patrick Industries (PATK) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Patrick Industries (PATK). PATK is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 7.92, which compares to its industry's average of 10.03. Over the last 12 months, PATK's Forward P/E has been as high as 15.21 and as low as 7.44, with a median of 10.

We should also highlight that PATK has a P/B ratio of 2.70. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.99. PATK's P/B has been as high as 3.89 and as low as 2.53, with a median of 3.02, over the past year.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PATK has a P/S ratio of 0.51. This compares to its industry's average P/S of 0.63.

Finally, investors should note that PATK has a P/CF ratio of 6.05. 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 14.98. Over the past year, PATK's P/CF has been as high as 11.96 and as low as 5.66, with a median of 7.98.

Value investors will likely look at more than just these metrics, but the above data helps show that Patrick Industries is likely undervalued currently. And when considering the strength of its earnings outlook, PATK sticks out at as one of the market's strongest value stocks.


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