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.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Malibu Boats (MBUU). MBUU is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 9.20 right now. For comparison, its industry sports an average P/E of 13.16. Over the past 52 weeks, MBUU's Forward P/E has been as high as 18.04 and as low as 8.98, with a median of 12.33.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MBUU has a P/S ratio of 1.22. This compares to its industry's average P/S of 1.28.
Finally, investors should note that MBUU has a P/CF ratio of 10.57. 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. MBUU's P/CF compares to its industry's average P/CF of 13.74. Over the past year, MBUU's P/CF has been as high as 27.17 and as low as 10.20, with a median of 18.70.
These are only a few of the key metrics included in Malibu Boats'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, MBUU looks like an impressive value stock at the moment.
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Malibu Boats, Inc. (MBUU) : Free Stock Analysis Report
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