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Is CECO Environmental (CECE) Stock Undervalued Right Now?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One company to watch right now is CECO Environmental (CECE - Free Report) . CECE is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 11.15, which compares to its industry's average of 22.99. Over the last 12 months, CECE's Forward P/E has been as high as 17.14 and as low as 6.40, with a median of 12.41.

We also note that CECE holds a PEG ratio of 0.74. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CECE's industry currently sports an average PEG of 1.80. Over the last 12 months, CECE's PEG has been as high as 1.14 and as low as 0.43, with a median of 0.83.

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. CECE has a P/S ratio of 0.63. This compares to its industry's average P/S of 1.01.

Finally, investors should note that CECE has a P/CF ratio of 7.69. 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. CECE's P/CF compares to its industry's average P/CF of 14.03. Over the past 52 weeks, CECE's P/CF has been as high as 14.79 and as low as 4.24, with a median of 8.78.

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


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