Should Value Investors Buy Commercial Vehicle Group (CVGI) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Commercial Vehicle Group (CVGI). CVGI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.08, which compares to its industry's average of 19.46. Over the past 52 weeks, CVGI's Forward P/E has been as high as 12.38 and as low as 3.72, with a median of 8.16.
Investors should also note that CVGI holds a PEG ratio of 0.48. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CVGI's industry has an average PEG of 0.94 right now. CVGI's PEG has been as high as 0.59 and as low as 0.18, with a median of 0.39, all within the past year.
Another valuation metric that we should highlight is CVGI's P/B ratio of 2.55. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. CVGI's current P/B looks attractive when compared to its industry's average P/B of 2.94. Within the past 52 weeks, CVGI's P/B has been as high as 2.63 and as low as 1, with a median of 1.75.
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 0.34. This compares to its industry's average P/S of 0.83.
If you're looking for another solid Automotive - Original Equipment value stock, take a look at Wabash National (WNC). WNC is a # 1 (Strong Buy) stock with a Value score of A.
Wabash National sports a P/B ratio of 2.97 as well; this compares to its industry's price-to-book ratio of 2.94. In the past 52 weeks, WNC's P/B has been as high as 3.61, as low as 1.84, with a median of 2.70.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Commercial Vehicle Group and Wabash National are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CVGI and WNC feels like a great value stock at the moment.
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Commercial Vehicle Group, Inc. (CVGI) : Free Stock Analysis Report
Wabash National Corporation (WNC) : Free Stock Analysis Report
