Should Value Investors Buy Arcosa (ACA) Stock?

ACA

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, 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Arcosa (ACA - Free Report) . ACA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Another valuation metric that we should highlight is ACA's P/B ratio of 1.51. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.84. Within the past 52 weeks, ACA's P/B has been as high as 1.69 and as low as 1.16, with a median of 1.44.

Finally, our model also underscores that ACA has a P/CF ratio of 7.82. 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. ACA's P/CF compares to its industry's average P/CF of 16.49. Within the past 12 months, ACA's P/CF has been as high as 12.35 and as low as 6.31, with a median of 8.23.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Arcosa is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ACA feels like a great value stock at the moment.

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