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Are Investors Undervaluing Escalade (ESCA) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 company to watch right now is Escalade (ESCA - Free Report) . ESCA 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 13.39. This compares to its industry's average Forward P/E of 24.55. Over the last 12 months, ESCA's Forward P/E has been as high as 25.23 and as low as 9.66, with a median of 12.76.

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. ESCA has a P/S ratio of 0.8. This compares to its industry's average P/S of 0.94.

Finally, investors should note that ESCA has a P/CF ratio of 10.31. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. ESCA's P/CF compares to its industry's average P/CF of 25.67. ESCA's P/CF has been as high as 20.24 and as low as 9.34, with a median of 10.64, all within the past year.

These are only a few of the key metrics included in Escalade's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ESCA looks like an impressive value stock at the moment.


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