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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 company value investors might notice is Thor Industries (THO). THO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.64 right now. For comparison, its industry sports an average P/E of 13.22. Over the past 52 weeks, THO's Forward P/E has been as high as 11.21 and as low as 7.03, with a median of 9.72.
Investors will also notice that THO has a PEG ratio of 0.62. 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. THO's industry has an average PEG of 0.78 right now. Within the past year, THO's PEG has been as high as 0.74 and as low as 0.61, with a median of 0.68.
Another notable valuation metric for THO is its P/B ratio of 1.64. 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 solid versus its industry's average P/B of 2.25. Over the past 12 months, THO's P/B has been as high as 2.96 and as low as 1.34, with a median of 1.91.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. THO has a P/S ratio of 0.44. This compares to its industry's average P/S of 1.07.
Finally, we should also recognize that THO has a P/CF ratio of 9.21. 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. THO's P/CF compares to its industry's average P/CF of 14.04. THO's P/CF has been as high as 11.54 and as low as 6.31, with a median of 9.40, all within the past year.
These are only a few of the key metrics included in Thor Industries'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, THO looks like an impressive value stock at the moment.
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