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Should Value Investors Buy Columbus McKinnon (CMCO) Stock?

Zacks Equity Research

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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 stock to keep an eye on is Columbus McKinnon (CMCO). CMCO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 10.91. This compares to its industry's average Forward P/E of 11.56. CMCO's Forward P/E has been as high as 18.79 and as low as 9.37, with a median of 14.72, all within the past year.

Finally, investors should note that CMCO has a P/CF ratio of 13.19. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. CMCO's current P/CF looks attractive when compared to its industry's average P/CF of 15.34. CMCO's P/CF has been as high as 22.36 and as low as 11.26, with a median of 16.46, all within the past year.

These are only a few of the key metrics included in Columbus McKinnon's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CMCO looks like an impressive value stock at the moment.


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