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Are Investors Undervaluing BRP (DOOO) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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.

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 company to watch right now is BRP (DOOO - Free Report) . DOOO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.22 right now. For comparison, its industry sports an average P/E of 23.51. Over the past 52 weeks, DOOO's Forward P/E has been as high as 10.74 and as low as 6.19, with a median of 8.26.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. DOOO has a P/S ratio of 0.6. This compares to its industry's average P/S of 0.79.

Gentherm (THRM - Free Report) may be another strong Automotive - Original Equipment stock to add to your shortlist. THRM is a # 2 (Buy) stock with a Value grade of A.

Additionally, Gentherm has a P/B ratio of 2.75 while its industry's price-to-book ratio sits at 2.53. For THRM, this valuation metric has been as high as 3.25, as low as 1.95, with a median of 2.75 over the past year.

These are just a handful of the figures considered in BRP and Gentherm'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 DOOO and THRM is an impressive value stock right now.


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