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Is PACCAR (PCAR) Stock Undervalued Right Now?

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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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 stock to keep an eye on is PACCAR (PCAR - Free Report) . PCAR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors will also notice that PCAR has a PEG ratio of 1.37. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PCAR's PEG compares to its industry's average PEG of 3.06. Within the past year, PCAR's PEG has been as high as 1.81 and as low as 1.19, with a median of 1.39.

Finally, we should also recognize that PCAR has a P/CF ratio of 11.88. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 29.87. Over the past 52 weeks, PCAR's P/CF has been as high as 14.77 and as low as 9.93, with a median of 11.57.

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


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