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Are Investors Undervaluing Vista Outdoor (VSTO) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Vista Outdoor (VSTO - Free Report) . VSTO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 12.53. This compares to its industry's average Forward P/E of 29.14. Over the last 12 months, VSTO's Forward P/E has been as high as 47.08 and as low as 7.87, with a median of 11.80.

We should also highlight that VSTO has a P/B ratio of 3.06. 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 attractive against its industry's average P/B of 9.07. VSTO's P/B has been as high as 3.21 and as low as 0.92, with a median of 2.24, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VSTO has a P/S ratio of 1.01. This compares to its industry's average P/S of 1.97.

These are only a few of the key metrics included in Vista Outdoor's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, VSTO looks like an impressive value stock at the moment.


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