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Should Value Investors Buy Commercial Vehicle Group (CVGI) Stock?

Zacks Equity Research
BRP Inc. (DOOO) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Commercial Vehicle Group (CVGI). CVGI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 6.35. This compares to its industry's average Forward P/E of 10.43. Over the past 52 weeks, CVGI's Forward P/E has been as high as 9.43 and as low as 3.81, with a median of 5.82.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CVGI has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.41.

Finally, our model also underscores that CVGI has a P/CF ratio of 5.60. 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. CVGI's P/CF compares to its industry's average P/CF of 6.64. Within the past 12 months, CVGI's P/CF has been as high as 22.52 and as low as 3.69, with a median of 6.04.

These are only a few of the key metrics included in Commercial Vehicle Group'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, CVGI looks like an impressive value stock at the moment.


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