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Ducommun Stock: 3 Reasons Why DCO Is a Top Choice for Value Investors
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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 system we 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 Ducommun Inc. (DCO - 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 DCO’s status as a solid value stock below:
Forward PE for Ducommun
Easily one of the most popular readings for value investors, the forward PE ratio shows us the current price of a stock divided by the full year earnings. Generally speaking, value investors like to see this ratio below 20, though it can vary by industry.
Right now, DCO has a forward PE of just 19.61, which means that investors are paying $19.61 for each dollar in expected Ducommun earnings this year. Compared to the industry at large this is pretty favorable as the overall space has an average PE of 19.99 in comparison.
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 0.58, DCO investors are paying 58 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 1.47, and it is safe to say that DCO is undervalued compared to many of its peers on this important metric.
DCO 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 DCO stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Ducommun now.
Over the past 60 days, the consensus estimate for current year has seen a boost, as 60 days ago DCO was expected to post earnings of $1.39 per share for the full year, though today it looks to have EPS of $1.45 for the full year.
So if you are a value investor, definitely keep DCO on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
The Best Place to Start Your Stock Search
Today, you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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Ducommun Stock: 3 Reasons Why DCO Is a Top Choice for Value Investors
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 system we 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 Ducommun Inc. (DCO - 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 DCO’s status as a solid value stock below:
Forward PE for Ducommun
Easily one of the most popular readings for value investors, the forward PE ratio shows us the current price of a stock divided by the full year earnings. Generally speaking, value investors like to see this ratio below 20, though it can vary by industry.
Right now, DCO has a forward PE of just 19.61, which means that investors are paying $19.61 for each dollar in expected Ducommun earnings this year. Compared to the industry at large this is pretty favorable as the overall space has an average PE of 19.99 in comparison.
DUCOMMUN INC DE PE Ratio (TTM)
DUCOMMUN INC DE PE Ratio (TTM) | DUCOMMUN INC DE Quote
Price to Forward Sales for Ducommun
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 0.58, DCO investors are paying 58 cents in stock price for each dollar of revenue generated by the company. Compare this to the industry average of 1.47, and it is safe to say that DCO is undervalued compared to many of its peers on this important metric.
DCO 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 DCO stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for Ducommun now.
Over the past 60 days, the consensus estimate for current year has seen a boost, as 60 days ago DCO was expected to post earnings of $1.39 per share for the full year, though today it looks to have EPS of $1.45 for the full year.
Bottom Line
For the reasons detailed above, investors shouldn’t be surprised to read that we have DCO as a stock with a Value Score of ‘A’ and a Zacks Rank #2 (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 DCO on your short list as this looks to be a stock that is very well-positioned for gains in the near term.
The Best Place to Start Your Stock Search
Today, you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>