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Is Commercial Vehicle an Incredible Value Stock? 3 Reasons Why CVGI Will Be Tough to Beat
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Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score systemwe have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on Commercial Vehicle Group Inc. (CVGI - Free Report) as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for CVGI’s status as a solid value stock below:
Price to Forward Sales for Commercial Vehicle
One of the most underrated ratios for value investors is the price/forward sales metric. This ratio shows investors how much they are paying for each dollar of revenues generated. In other words, a lower number is better here while a price to sales ratio of 1 means that you are paying one dollar for each dollar in sales.
With a P/S ratio of 22, CVGI investors are paying 22 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 61, and it is safe to say that CVGI is undervalued compared to many of its peers on this important metric.
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. This reading is preferred by some since it avoids amortization and depreciation concerns and can give a more accurate picture of the financial health in a business.
The P/CF ratio for CVGI comes in at 2.81, and since investors are generally looking for a reading under 20 here, this is pretty good news. Meanwhile, we should also point out that the industry average for this metric is 6.53, so Commercial Vehicle has its peers beat in this regard too.
CVGI Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow CVGI stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Commercial Vehicle now.
Over the past 30 days, 1 earnings estimate has gone higher compared to none lower for the full year. These revisions have helped to boost the consensus estimate as 30 days ago CVGI was expected to post earnings of 21 cents per share for the full year though today it looks to have EPS of 24 cents for the full year.
So if you are a value investor, definitely keep CVGI on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
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Is Commercial Vehicle an Incredible Value Stock? 3 Reasons Why CVGI Will Be Tough to Beat
Many investors like to look for value in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score systemwe have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term.
This method discovered several great candidates for value-oriented investors, but today let’s focus on Commercial Vehicle Group Inc. (CVGI - Free Report) as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for CVGI’s status as a solid value stock below:
Price to Forward Sales for Commercial Vehicle
One of the most underrated ratios for value investors is the price/forward sales metric. This ratio shows investors how much they are paying for each dollar of revenues generated. In other words, a lower number is better here while a price to sales ratio of 1 means that you are paying one dollar for each dollar in sales.
With a P/S ratio of 22, CVGI investors are paying 22 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 61, and it is safe to say that CVGI is undervalued compared to many of its peers on this important metric.
COMML VEHICLE PS Ratio (TTM)
COMML VEHICLE PS Ratio (TTM) | COMML VEHICLE Quote
Price/Cash Flow for Commercial Vehicle Stock
An often overlooked ratio that can still be a great indicator of value is the price/cash flow metric. This reading is preferred by some since it avoids amortization and depreciation concerns and can give a more accurate picture of the financial health in a business.
The P/CF ratio for CVGI comes in at 2.81, and since investors are generally looking for a reading under 20 here, this is pretty good news. Meanwhile, we should also point out that the industry average for this metric is 6.53, so Commercial Vehicle has its peers beat in this regard too.
CVGI Earnings Estimate Revisions Moving in the Right Direction
The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow CVGI stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Commercial Vehicle now.
Over the past 30 days, 1 earnings estimate has gone higher compared to none lower for the full year. These revisions have helped to boost the consensus estimate as 30 days ago CVGI was expected to post earnings of 21 cents per share for the full year though today it looks to have EPS of 24 cents for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised to read that we have CVGI as a stock with a Value Score of ‘A’ and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
So if you are a value investor, definitely keep CVGI on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>