Back to top

Image: Bigstock

Is Titan Machinery (TITN) Stock Undervalued Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

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.

Titan Machinery (TITN - Free Report) is a stock many investors are watching right now. TITN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Investors should also recognize that TITN has a P/B ratio of 1.16. Investors use the P/B ratio to look at a stock's market value versus 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 1.50. TITN's P/B has been as high as 1.23 and as low as 0.46, with a median of 0.77, over the past year.

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. TITN has a P/S ratio of 0.31. This compares to its industry's average P/S of 0.39.

Finally, investors will want to recognize that TITN has a P/CF ratio of 9.50. 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 11.41. Over the past year, TITN's P/CF has been as high as 10.12 and as low as 3.73, with a median of 6.23.

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


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Titan Machinery Inc. (TITN) - free report >>

Published in