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Is Huntington Ingalls Industries (HII) Stock Undervalued 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, 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company to watch right now is Huntington Ingalls Industries (HII - Free Report) . HII is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 13.05. This compares to its industry's average Forward P/E of 20.20. Over the past year, HII's Forward P/E has been as high as 16.90 and as low as 11.78, with a median of 13.81.

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. HII has a P/S ratio of 0.86. This compares to its industry's average P/S of 1.34.

Finally, investors should note that HII has a P/CF ratio of 10.07. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 21.01. Over the past year, HII's P/CF has been as high as 10.58 and as low as 7.47, with a median of 8.79.

These are just a handful of the figures considered in Huntington Ingalls Industries'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 HII is an impressive value stock right now.


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