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Should Value Investors Buy Haverty Furniture (HVT) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
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 company to watch right now is Haverty Furniture (HVT - Free Report) . HVT is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 11.37 right now. For comparison, its industry sports an average P/E of 17.46. Over the past year, HVT's Forward P/E has been as high as 30.88 and as low as 10.21, with a median of 19.49.
Another notable valuation metric for HVT is its P/B ratio of 3.18. 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 company's current P/B looks solid when compared to its industry's average P/B of 9.43. Within the past 52 weeks, HVT's P/B has been as high as 3.25 and as low as 0.94, with a median of 1.91.
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. HVT has a P/S ratio of 1.09. This compares to its industry's average P/S of 1.25.
Finally, our model also underscores that HVT has a P/CF ratio of 9.36. 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 stock's P/CF looks attractive against its industry's average P/CF of 20.91. HVT's P/CF has been as high as 9.84 and as low as 5.70, with a median of 8.38, all within the past year.
These are just a handful of the figures considered in Haverty Furniture's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that HVT is an impressive value stock right now.