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Should Value Investors Buy PACCAR (PCAR) Stock?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is PACCAR (PCAR - Free Report) . PCAR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 14.88, while its industry has an average P/E of 30.14. Over the past 52 weeks, PCAR's Forward P/E has been as high as 14.97 and as low as 9.44, with a median of 11.66.

Investors should also note that PCAR holds a PEG ratio of 1.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PCAR's PEG compares to its industry's average PEG of 2.73. Over the past 52 weeks, PCAR's PEG has been as high as 1.90 and as low as 0.94, with a median of 1.17.

Finally, investors should note that PCAR has a P/CF ratio of 11.79. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 15. PCAR's P/CF has been as high as 11.84 and as low as 8.57, with a median of 9.90, all within the past year.

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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