Should Value Investors Buy Terex (TEX) 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.
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 Terex (TEX). TEX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.76. This compares to its industry's average Forward P/E of 15.65. TEX's Forward P/E has been as high as 12.04 and as low as 6.36, with a median of 8.38, all within the past year.
TEX is also sporting a PEG ratio of 0.64. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TEX's PEG compares to its industry's average PEG of 1.13. Over the past 52 weeks, TEX's PEG has been as high as 0.65 and as low as 0.36, with a median of 0.47.
Investors should also recognize that TEX has a P/B ratio of 3.21. 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 6.76. Over the past year, TEX's P/B has been as high as 3.28 and as low as 1.73, with a median of 2.28.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. TEX has a P/S ratio of 0.85. This compares to its industry's average P/S of 0.89.
Finally, investors should note that TEX has a P/CF ratio of 11.09. 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 stock's P/CF looks attractive against its industry's average P/CF of 11.18. Within the past 12 months, TEX's P/CF has been as high as 11.77 and as low as 6.48, with a median of 8.83.
These are just a handful of the figures considered in Terex'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 TEX is an impressive value stock right now.
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Terex Corporation (TEX) : Free Stock Analysis Report
