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Should Value Investors Buy These Auto-Tires-Trucks Stocks?

·3 min read

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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 BRP (DOOO). DOOO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.05, which compares to its industry's average of 19.31. Over the last 12 months, DOOO's Forward P/E has been as high as 19.81 and as low as 8.05, with a median of 11.84.

Finally, our model also underscores that DOOO has a P/CF ratio of 6.28. 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. DOOO's P/CF compares to its industry's average P/CF of 13.31. Within the past 12 months, DOOO's P/CF has been as high as 18.32 and as low as 6.28, with a median of 8.40.

If you're looking for another solid Automotive - Original Equipment value stock, take a look at Wabash National (WNC). WNC is a # 2 (Buy) stock with a Value score of A.

Additionally, Wabash National has a P/B ratio of 2.60 while its industry's price-to-book ratio sits at 3.39. For WNC, this valuation metric has been as high as 3.29, as low as 1.69, with a median of 2.24 over the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that BRP and Wabash National are likely undervalued currently. And when considering the strength of its earnings outlook, DOOO and WNC sticks out as one of the market's strongest value stocks.


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BRP Inc. (DOOO) : Free Stock Analysis Report
 
Wabash National Corporation (WNC) : Free Stock Analysis Report
 
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