Back to top

Image: Bigstock

Should Value Investors Buy Polaris Industries (PII) Stock?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One stock to keep an eye on is Polaris Industries (PII - Free Report) . PII is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. PII has a P/S ratio of 1.06. This compares to its industry's average P/S of 1.26.

Finally, we should also recognize that PII has a P/CF ratio of 10.33. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 21.99. Within the past 12 months, PII's P/CF has been as high as 12.36 and as low as 4.69, with a median of 9.71.

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


In-Depth Zacks Research for the Tickers Above


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


Polaris Inc. (PII) - free report >>

Published in