Should Value Investors Buy Thor Industries (THO) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 company to watch right now is Thor Industries (THO). THO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that THO has a P/B ratio of 1.36. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.90. Within the past 52 weeks, THO's P/B has been as high as 1.59 and as low as 1.04, with a median of 1.23.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. THO has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.49.
Finally, investors will want to recognize that THO has a P/CF ratio of 6.29. 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. THO's current P/CF looks attractive when compared to its industry's average P/CF of 8.18. Over the past 52 weeks, THO's P/CF has been as high as 7.33 and as low as 2.62, with a median of 3.96.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Thor Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, THO feels like a great value stock at the moment.
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Thor Industries, Inc. (THO) : Free Stock Analysis Report
