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Is HarleyDavidson (HOG) a Great Value Stock 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.

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 HarleyDavidson (HOG - Free Report) . HOG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.44 right now. For comparison, its industry sports an average P/E of 18.72. Over the past 52 weeks, HOG's Forward P/E has been as high as 12.66 and as low as 6.91, with a median of 8.74.

Investors should also note that HOG holds a PEG ratio of 0.91. 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. HOG's industry has an average PEG of 1.26 right now. Within the past year, HOG's PEG has been as high as 1.14 and as low as 0.18, with a median of 0.83.

Another notable valuation metric for HOG is its P/B ratio of 2.07. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.71. Within the past 52 weeks, HOG's P/B has been as high as 2.61 and as low as 1.74, with a median of 2.22.

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. HOG has a P/S ratio of 1.1. This compares to its industry's average P/S of 2.54.

Finally, we should also recognize that HOG has a P/CF ratio of 5.99. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.28. Within the past 12 months, HOG's P/CF has been as high as 7.35 and as low as 5.18, with a median of 6.43.

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

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