Back to top

Image: Bigstock

Should Value Investors Buy Vontier (VNT) Stock?

Read MoreHide Full Article

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, 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.

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.

Vontier (VNT - Free Report) is a stock many investors are watching right now. VNT is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 12.63. This compares to its industry's average Forward P/E of 22.08. Over the past year, VNT's Forward P/E has been as high as 12.96 and as low as 8.65, with a median of 11.59.

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. VNT has a P/S ratio of 1.42. This compares to its industry's average P/S of 1.81.

Finally, investors will want to recognize that VNT has a P/CF ratio of 12.23. 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. This stock's P/CF looks attractive against its industry's average P/CF of 36.39. Within the past 12 months, VNT's P/CF has been as high as 12.36 and as low as 8.36, with a median of 10.65.

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

Published in