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Are Investors Undervaluing PACCAR (PCAR) Right Now?
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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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 - Free Report) . PCAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
PCAR is also sporting a PEG ratio of 1.15. 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. PCAR's PEG compares to its industry's average PEG of 2.70. PCAR's PEG has been as high as 1.32 and as low as 0.94, with a median of 1.16, all within the past year.
We should also highlight that PCAR has a P/B ratio of 2.98. 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. This stock's P/B looks attractive against its industry's average P/B of 4.51. Over the past year, PCAR's P/B has been as high as 3.11 and as low as 2.26, with a median of 2.75.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PCAR has a P/S ratio of 1.38. This compares to its industry's average P/S of 2.24.
Finally, we should also recognize that PCAR has a P/CF ratio of 10.01. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.08. 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 9.98.
If you're looking for another solid Automotive - Domestic value stock, take a look at Polaris (PII - Free Report) . PII is a # 2 (Buy) stock with a Value score of A.
Polaris sports a P/B ratio of 5.64 as well; this compares to its industry's price-to-book ratio of 4.51. In the past 52 weeks, PII's P/B has been as high as 6.79, as low as 5.06, with a median of 5.78.
Value investors will likely look at more than just these metrics, but the above data helps show that PACCAR and Polaris are likely undervalued currently. And when considering the strength of its earnings outlook, PCAR and PII sticks out as one of the market's strongest value stocks.
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Are Investors Undervaluing PACCAR (PCAR) Right Now?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 - Free Report) . PCAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
PCAR is also sporting a PEG ratio of 1.15. 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. PCAR's PEG compares to its industry's average PEG of 2.70. PCAR's PEG has been as high as 1.32 and as low as 0.94, with a median of 1.16, all within the past year.
We should also highlight that PCAR has a P/B ratio of 2.98. 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. This stock's P/B looks attractive against its industry's average P/B of 4.51. Over the past year, PCAR's P/B has been as high as 3.11 and as low as 2.26, with a median of 2.75.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PCAR has a P/S ratio of 1.38. This compares to its industry's average P/S of 2.24.
Finally, we should also recognize that PCAR has a P/CF ratio of 10.01. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.08. 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 9.98.
If you're looking for another solid Automotive - Domestic value stock, take a look at Polaris (PII - Free Report) . PII is a # 2 (Buy) stock with a Value score of A.
Polaris sports a P/B ratio of 5.64 as well; this compares to its industry's price-to-book ratio of 4.51. In the past 52 weeks, PII's P/B has been as high as 6.79, as low as 5.06, with a median of 5.78.
Value investors will likely look at more than just these metrics, but the above data helps show that PACCAR and Polaris are likely undervalued currently. And when considering the strength of its earnings outlook, PCAR and PII sticks out as one of the market's strongest value stocks.