Should Value Investors Buy Virco Manufacturing (VIRC) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Virco Manufacturing (VIRC). VIRC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
We should also highlight that VIRC has a P/B ratio of 1.03. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. VIRC's current P/B looks attractive when compared to its industry's average P/B of 3.08. Over the past 12 months, VIRC's P/B has been as high as 1.59 and as low as 0.87, with a median of 1.08.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VIRC has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.38.
Finally, our model also underscores that VIRC has a P/CF ratio of 2.73. 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. VIRC's current P/CF looks attractive when compared to its industry's average P/CF of 8.64. Over the past 52 weeks, VIRC's P/CF has been as high as 51.13 and as low as -16.12, with a median of 2.73.
These are just a handful of the figures considered in Virco Manufacturing'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 VIRC is an impressive value stock right now.
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Virco Manufacturing Corporation (VIRC) : Free Stock Analysis Report
