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Should Value Investors Buy UFP Industries (UFPI) Stock?
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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 value investors might notice is UFP Industries (UFPI - Free Report) . UFPI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 15.06, which compares to its industry's average of 26.43. Over the last 12 months, UFPI's Forward P/E has been as high as 16.50 and as low as 9.18, with a median of 11.62.
Investors should also recognize that UFPI has a P/B ratio of 2.44. 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. UFPI's current P/B looks attractive when compared to its industry's average P/B of 3.37. Over the past 12 months, UFPI's P/B has been as high as 2.67 and as low as 1.75, with a median of 2.12.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. UFPI has a P/S ratio of 0.94. This compares to its industry's average P/S of 1.4.
Finally, we should also recognize that UFPI has a P/CF ratio of 11.11. 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 28.25. Within the past 12 months, UFPI's P/CF has been as high as 12.13 and as low as 5.98, with a median of 8.85.
These figures are just a handful of the metrics value investors tend to look at, but they help show that UFP Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UFPI feels like a great value stock at the moment.
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Should Value Investors Buy UFP Industries (UFPI) Stock?
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.
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 value investors might notice is UFP Industries (UFPI - Free Report) . UFPI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 15.06, which compares to its industry's average of 26.43. Over the last 12 months, UFPI's Forward P/E has been as high as 16.50 and as low as 9.18, with a median of 11.62.
Investors should also recognize that UFPI has a P/B ratio of 2.44. 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. UFPI's current P/B looks attractive when compared to its industry's average P/B of 3.37. Over the past 12 months, UFPI's P/B has been as high as 2.67 and as low as 1.75, with a median of 2.12.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. UFPI has a P/S ratio of 0.94. This compares to its industry's average P/S of 1.4.
Finally, we should also recognize that UFPI has a P/CF ratio of 11.11. 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 28.25. Within the past 12 months, UFPI's P/CF has been as high as 12.13 and as low as 5.98, with a median of 8.85.
These figures are just a handful of the metrics value investors tend to look at, but they help show that UFP Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UFPI feels like a great value stock at the moment.