Should Value Investors Buy PACCAR (PCAR) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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 stock to keep an eye on is PACCAR (PCAR). PCAR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Investors should also note that PCAR holds a PEG ratio of 1.29. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PCAR's PEG compares to its industry's average PEG of 3.40. Over the past 52 weeks, PCAR's PEG has been as high as 1.32 and as low as 0.94, with a median of 1.16.
Another valuation metric that we should highlight is PCAR's P/B ratio of 3.13. 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 4.82. PCAR's P/B has been as high as 3.20 and as low as 2.58, with a median of 2.87, over the past year.
Finally, investors will want to recognize that PCAR has a P/CF ratio of 10.08. 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. PCAR's P/CF compares to its industry's average P/CF of 19.13. Within the past 12 months, PCAR's P/CF has been as high as 11.24 and as low as 8.57, with a median of 9.90.
These are just a handful of the figures considered in PACCAR'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 PCAR is an impressive value stock right now.
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PACCAR Inc. (PCAR) : Free Stock Analysis Report
