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Are Investors Undervaluing Flowserve (FLS) 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.

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 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.

One stock to keep an eye on is Flowserve (FLS - Free Report) . FLS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 20.61, which compares to its industry's average of 25.67. Over the past year, FLS's Forward P/E has been as high as 23.70 and as low as 8.08, with a median of 19.14.

We should also highlight that FLS has a P/B ratio of 2.31. The P/B is a method of comparing a stock's market value to 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 4.57. Within the past 52 weeks, FLS's P/B has been as high as 3.85 and as low as 1.39, with a median of 3.20.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FLS has a P/S ratio of 0.93. This compares to its industry's average P/S of 1.18.

Finally, investors should note that FLS has a P/CF ratio of 13.13. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. FLS's P/CF compares to its industry's average P/CF of 17.17. Over the past 52 weeks, FLS's P/CF has been as high as 21.41 and as low as 7.07, with a median of 17.05.

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


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