Back to top

Image: Bigstock

Is Thor Industries (THO) a Great Value Stock Right Now?

Read MoreHide Full Article

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.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Thor Industries (THO - Free Report) . THO is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 7.94, while its industry has an average P/E of 10.66. THO's Forward P/E has been as high as 16.36 and as low as 7.44, with a median of 12.12, all within the past year.

Another valuation metric that we should highlight is THO's P/B ratio of 2.04. 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. THO's current P/B looks attractive when compared to its industry's average P/B of 2.99. THO's P/B has been as high as 3.25 and as low as 1.84, with a median of 2.29, 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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. THO has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.67.

Finally, we should also recognize that THO has a P/CF ratio of 6.70. 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. THO's current P/CF looks attractive when compared to its industry's average P/CF of 14.99. Within the past 12 months, THO's P/CF has been as high as 13.90 and as low as 6.28, with a median of 9.42.

These are only a few of the key metrics included in Thor Industries'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, THO looks like an impressive value stock at the moment.

In-Depth Zacks Research for the Tickers Above

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

Thor Industries, Inc. (THO) - free report >>

Published in