Should Value Investors Buy Griffon (GFF) 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Griffon (GFF). GFF is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 21.27. This compares to its industry's average Forward P/E of 25.04. Over the last 12 months, GFF's Forward P/E has been as high as 24.03 and as low as 6.43, with a median of 14.83.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. GFF has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.91.
Finally, we should also recognize that GFF has a P/CF ratio of 8.78. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 30.84. Within the past 12 months, GFF's P/CF has been as high as 10.59 and as low as 3.93, with a median of 8.35.
These are just a handful of the figures considered in Griffon's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GFF is an impressive value stock right now.
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