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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 to watch right now is Thor Industries (THO). THO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.86. This compares to its industry's average Forward P/E of 13.05. 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 0.70. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. THO's industry currently sports an average PEG of 0.77. Over the past 52 weeks, THO's PEG has been as high as 0.74 and as low as 0.63, with a median of 0.70.
We should also highlight that THO has a P/B ratio of 1.85. 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. This stock's P/B looks solid versus its industry's average P/B of 2.20. Over the past 12 months, THO's P/B has been as high as 3.07 and as low as 1.34, with a median of 1.93.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. THO has a P/S ratio of 0.48. This compares to its industry's average P/S of 1.07.
Finally, investors should note that THO has a P/CF ratio of 10.43. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 10.73. THO's P/CF has been as high as 11.54 and as low as 6.31, with a median of 9.41, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Thor Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, THO feels like a great value stock at the moment.
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