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Should Value Investors Buy Tempur Sealy (TPX) Stock?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Tempur Sealy (TPX - Free Report) is a stock many investors are watching right now. TPX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 13.20, which compares to its industry's average of 17.64. Over the past 52 weeks, TPX's Forward P/E has been as high as 24.03 and as low as 11.82, with a median of 14.12.

TPX is also sporting a PEG ratio of 0.61. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TPX's PEG compares to its industry's average PEG of 0.77. Over the last 12 months, TPX's PEG has been as high as 1.70 and as low as 0.37, with a median of 0.72.

Finally, investors should note that TPX has a P/CF ratio of 13.04. 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. TPX's current P/CF looks attractive when compared to its industry's average P/CF of 21.48. Within the past 12 months, TPX's P/CF has been as high as 15.24 and as low as 10.19, with a median of 12.36.

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


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