Should Value Investors Buy Blue Bird (BLBD) 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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One company to watch right now is Blue Bird (BLBD). BLBD 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 10.06 right now. For comparison, its industry sports an average P/E of 14.33. Over the last 12 months, BLBD's Forward P/E has been as high as 11.68 and as low as 9.16, with a median of 9.96.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. BLBD has a P/S ratio of 0.57. This compares to its industry's average P/S of 0.85.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Blue Bird is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BLBD feels like a great value stock at the moment.
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