Should Value Investors Buy Autoliv (ALV) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Autoliv (ALV) is a stock many investors are watching right now. ALV is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 11.86, while its industry has an average P/E of 19.22. Over the past 52 weeks, ALV's Forward P/E has been as high as 18.36 and as low as 9.87, with a median of 11.98.
Investors should also note that ALV holds a PEG ratio of 0.40. 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. ALV's industry currently sports an average PEG of 0.88. Over the last 12 months, ALV's PEG has been as high as 0.64 and as low as 0.40, with a median of 0.54.
Another notable valuation metric for ALV is its P/B ratio of 3.28. 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 attractive against its industry's average P/B of 3.43. Within the past 52 weeks, ALV's P/B has been as high as 3.43 and as low as 2.27, with a median of 2.84.
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. ALV has a P/S ratio of 0.85. This compares to its industry's average P/S of 0.93.
Investors could also keep in mind Commercial Vehicle Group (CVGI), an Automotive - Original Equipment stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Commercial Vehicle Group is trading at a forward earnings multiple of 9.93 at the moment, with a PEG ratio of 0.45. This compares to its industry's average P/E of 19.22 and average PEG ratio of 0.88.
Over the past year, CVGI's P/E has been as high as 12.38, as low as 3.72, with a median of 9.37; its PEG ratio has been as high as 0.59, as low as 0.18, with a median of 0.54 during the same time period.
Commercial Vehicle Group sports a P/B ratio of 2.62 as well; this compares to its industry's price-to-book ratio of 3.43. In the past 52 weeks, CVGI's P/B has been as high as 2.86, as low as 1, with a median of 1.89.
These are only a few of the key metrics included in Autoliv and Commercial Vehicle Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ALV and CVGI look like an impressive value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Autoliv, Inc. (ALV) : Free Stock Analysis Report
Commercial Vehicle Group, Inc. (CVGI) : Free Stock Analysis Report
