Should Value Investors Buy Adient (ADNT) Stock?
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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Adient (ADNT). ADNT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.06 right now. For comparison, its industry sports an average P/E of 18.30. ADNT's Forward P/E has been as high as 17.37 and as low as 9.01, with a median of 12.91, all within the past year.
We also note that ADNT holds a PEG ratio of 0.34. 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. ADNT's PEG compares to its industry's average PEG of 0.81. Over the last 12 months, ADNT's PEG has been as high as 0.36 and as low as 0.29, with a median of 0.32.
We should also highlight that ADNT has a P/B ratio of 1.31. The P/B ratio pits a stock's market value against 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 2.29. ADNT's P/B has been as high as 1.78 and as low as 1.26, with a median of 1.45, over the past year.
Finally, our model also underscores that ADNT has a P/CF ratio of 7.19. 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. ADNT's current P/CF looks attractive when compared to its industry's average P/CF of 25.86. Within the past 12 months, ADNT's P/CF has been as high as 16.86 and as low as 7.12, with a median of 10.50.
Another great Automotive - Original Equipment stock you could consider is Autoliv (ALV), which is a # 2 (Buy) stock with a Value Score of A.
Shares of Autoliv are currently trading at a forward earnings multiple of 10.70 and a PEG ratio of 0.37 compared to its industry's P/E and PEG ratios of 18.30 and 0.81, respectively.
ALV's Forward P/E has been as high as 18.36 and as low as 10.18, with a median of 11.87. During the same time period, its PEG ratio has been as high as 0.64, as low as 0.35, with a median of 0.53.
Autoliv sports a P/B ratio of 3.27 as well; this compares to its industry's price-to-book ratio of 2.29. In the past 52 weeks, ALV's P/B has been as high as 3.43, as low as 2.53, with a median of 2.98.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Adient and Autoliv are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ADNT and ALV feels like a great value stock at the moment.
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Adient (ADNT) : Free Stock Analysis Report
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