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Is Beacon Roofing Supply (BECN) a Great Value Stock Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Beacon Roofing Supply (BECN - Free Report) is a stock many investors are watching right now. BECN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 14.66. This compares to its industry's average Forward P/E of 21.50. BECN's Forward P/E has been as high as 17.80 and as low as 4.55, with a median of 13.35, all within the past year.

Investors should also note that BECN holds a PEG ratio of 1.09. 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. BECN's PEG compares to its industry's average PEG of 1.71. Within the past year, BECN's PEG has been as high as 1.34 and as low as 1.01, with a median of 1.16.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BECN has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.73.

Finally, we should also recognize that BECN has a P/CF ratio of 9.29. 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. BECN's P/CF compares to its industry's average P/CF of 15.41. Within the past 12 months, BECN's P/CF has been as high as 10.36 and as low as 2.85, with a median of 7.75.

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


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