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Is Tempur Sealy (TPX) 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Tempur Sealy (TPX - Free Report) . TPX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 12.81, which compares to its industry's average of 18.04. Over the past year, TPX's Forward P/E has been as high as 24.29 and as low as 4.15, with a median of 15.05.

Investors should also note that TPX holds a PEG ratio of 0.55. 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. TPX's PEG compares to its industry's average PEG of 1.28. Over the last 12 months, TPX's PEG has been as high as 1.89 and as low as 0.20, with a median of 0.65.

Finally, investors will want to recognize that TPX has a P/CF ratio of 11.76. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 21.94. Over the past 52 weeks, TPX's P/CF has been as high as 18.35 and as low as 4.30, with a median of 11.90.

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


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