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Should Value Investors Buy Strattec Security (STRT) 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, 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Strattec Security (STRT - Free Report) is a stock many investors are watching right now. STRT is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 12.21, which compares to its industry's average of 20.78. STRT's Forward P/E has been as high as 26.50 and as low as 8.54, with a median of 14.75, all within the past year.

Investors will also notice that STRT has a PEG ratio of 1.22. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. STRT's industry has an average PEG of 1.46 right now. STRT's PEG has been as high as 2.65 and as low as 0.85, with a median of 1.48, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. STRT has a P/S ratio of 0.45. This compares to its industry's average P/S of 0.63.

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


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