Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put LCI Industries (LCII - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, LCI Industries has a trailing twelve months PE ratio of 17.6, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.1. If we focus on the stock’s long-term PE trend, the current level puts LCI Industries’ current PE ratio below its midpoint over the past five years.
However, the stock’s PE also compares unfavorably with the industry’s trailing twelve months PE ratio, which stands at 13.4. This indicates that the stock is relatively overvalued right now, compared to its peers.
We should also point out that LCI Industries has a forward PE ratio (price relative to this year’s earnings) of just 12.5, so it is fair to say that a slightly more value-oriented path may be ahead for LCI Industries stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, LCI Industries has a P/S ratio of about 1.2. This is significantly lower than the S&P 500 average, which comes in at 3.2 right now. Also, as we can see in the chart below, this is a somewhat below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, LCI Industries currently has a Zacks Value Style Score of B, putting it into the top 40% of all stocks we cover from this look. This makes LCI Industries a solid choice for value investors.
What About the Stock Overall?
Though LCI Industries might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of B and a Momentum score of C. This gives LCII a Zacks VGM score—or its overarching fundamental grade—of B. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have favorable. Over the last one month, both the current quarter and current year has seen one analyst moving north, compared to no movement in the opposite direction.
As a result, the current quarter consensus estimate has risen by 28% in the past one month, while the full year estimate has inched upper by 22.7%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
LCI Industries Price and Consensus
This bullish trend is why the stock boasts a Zacks Rank #1 (Strong Buy) and why we are expecting outperformance from the company in the near term.
Bottom Line
LCI Industries is an inspired choice for value investors, as it is hard to beat its incredible lineup of sta tistics on this front. Furthermore, a strong industry rank (among Top 20% of more than 250 industries) and Zacks Rank boosts our confidence on the stock.In fact, over the past year, its industry has clearly outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put LCI Industries (LCII - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, LCI Industries has a trailing twelve months PE ratio of 17.6, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.1. If we focus on the stock’s long-term PE trend, the current level puts LCI Industries’ current PE ratio below its midpoint over the past five years.
However, the stock’s PE also compares unfavorably with the industry’s trailing twelve months PE ratio, which stands at 13.4. This indicates that the stock is relatively overvalued right now, compared to its peers.
We should also point out that LCI Industries has a forward PE ratio (price relative to this year’s earnings) of just 12.5, so it is fair to say that a slightly more value-oriented path may be ahead for LCI Industries stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, LCI Industries has a P/S ratio of about 1.2. This is significantly lower than the S&P 500 average, which comes in at 3.2 right now. Also, as we can see in the chart below, this is a somewhat below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, LCI Industries currently has a Zacks Value Style Score of B, putting it into the top 40% of all stocks we cover from this look. This makes LCI Industries a solid choice for value investors.
What About the Stock Overall?
Though LCI Industries might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of B and a Momentum score of C. This gives LCII a Zacks VGM score—or its overarching fundamental grade—of B. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have favorable. Over the last one month, both the current quarter and current year has seen one analyst moving north, compared to no movement in the opposite direction.
As a result, the current quarter consensus estimate has risen by 28% in the past one month, while the full year estimate has inched upper by 22.7%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
LCI Industries Price and Consensus
This bullish trend is why the stock boasts a Zacks Rank #1 (Strong Buy) and why we are expecting outperformance from the company in the near term.
Bottom Line
LCI Industries is an inspired choice for value investors, as it is hard to beat its incredible lineup of sta tistics on this front. Furthermore, a strong industry rank (among Top 20% of more than 250 industries) and Zacks Rank boosts our confidence on the stock.In fact, over the past year, its industry has clearly outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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