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Is Huntington Ingalls (HII) Stock Undervalued Right Now?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

Huntington Ingalls (HII - Free Report) is a stock many investors are watching right now. HII is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 14.50. This compares to its industry's average Forward P/E of 19.05. Over the past year, HII's Forward P/E has been as high as 21.31 and as low as 11.87, with a median of 14.95.

We also note that HII holds a PEG ratio of 0.97. 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. HII's industry has an average PEG of 1.62 right now. Over the past 52 weeks, HII's PEG has been as high as 1.42 and as low as 0.79, with a median of 1.

Finally, investors should note that HII has a P/CF ratio of 13.47. 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. HII's P/CF compares to its industry's average P/CF of 15.12. Over the past 52 weeks, HII's P/CF has been as high as 17.82 and as low as 11.73, with a median of 13.40.

Value investors will likely look at more than just these metrics, but the above data helps show that Huntington Ingalls is likely undervalued currently. And when considering the strength of its earnings outlook, HII sticks out at as one of the market's strongest value stocks.


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