Should Value Investors Buy Brother Industries (BRTHY) Stock?

BRTHY

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Brother Industries (BRTHY - Free Report) . BRTHY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 12.49. This compares to its industry's average Forward P/E of 19.83. Over the last 12 months, BRTHY's Forward P/E has been as high as 13.75 and as low as 9.19, with a median of 11.69.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BRTHY has a P/S ratio of 0.82. This compares to its industry's average P/S of 1.19.

Finally, we should also recognize that BRTHY has a P/CF ratio of 7.27. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BRTHY's P/CF compares to its industry's average P/CF of 21.03. Over the past 52 weeks, BRTHY's P/CF has been as high as 7.73 and as low as 5.97, with a median of 6.99.

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

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