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Should Value Investors Buy Strattec Security (STRT) Stock?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Strattec Security (STRT - Free Report) is a stock many investors are watching right now. STRT is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 12.15 right now. For comparison, its industry sports an average P/E of 13.91. Over the past year, STRT's Forward P/E has been as high as 18.24 and as low as 4.41, with a median of 10.91.

Investors should also note that STRT holds a PEG ratio of 0.81. 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. STRT's industry currently sports an average PEG of 1.60. Over the past 52 weeks, STRT's PEG has been as high as 1.22 and as low as 0.29, with a median of 0.73.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. STRT has a P/S ratio of 0.18. This compares to its industry's average P/S of 0.36.

Finally, we should also recognize that STRT has a P/CF ratio of 2.95. 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. STRT's P/CF compares to its industry's average P/CF of 7.78. Over the past year, STRT's P/CF has been as high as 4.63 and as low as -41.67, with a median of 2.77.

These are just a handful of the figures considered in Strattec Security's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that STRT is an impressive value stock right now.


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