U.S. Markets open in 8 hrs 34 mins

Should Value Investors Buy Container Store Group (TCS) Stock?

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 value investors might notice is Container Store Group (TCS). TCS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Another valuation metric that we should highlight is TCS's P/B ratio of 1.71. 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. This stock's P/B looks attractive against its industry's average P/B of 4.43. Over the past year, TCS's P/B has been as high as 1.94 and as low as 0.36, with a median of 0.76.

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. TCS has a P/S ratio of 0.58. This compares to its industry's average P/S of 0.81.

Finally, investors will want to recognize that TCS has a P/CF ratio of 8.46. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.85. Over the past 52 weeks, TCS's P/CF has been as high as 9.60 and as low as 1.76, with a median of 3.76.

Value investors will likely look at more than just these metrics, but the above data helps show that Container Store Group is likely undervalued currently. And when considering the strength of its earnings outlook, TCS sticks out at as one of the market's strongest value stocks.


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
 
Container Store The (TCS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.