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Is Callaway Golf (ELY) a Great Value Stock Right Now?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Callaway Golf (ELY - Free Report) . ELY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also note that ELY holds a PEG ratio of 0.68. 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. ELY's industry currently sports an average PEG of 0.81. Over the past 52 weeks, ELY's PEG has been as high as 1.81 and as low as 0.68, with a median of 0.95.

We should also highlight that ELY has a P/B ratio of 2.35. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. ELY's current P/B looks attractive when compared to its industry's average P/B of 3.72. Over the past 12 months, ELY's P/B has been as high as 3.06 and as low as 1.96, with a median of 2.41.

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. ELY has a P/S ratio of 1.29. This compares to its industry's average P/S of 1.34.

Finally, our model also underscores that ELY has a P/CF ratio of 13.65. 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 stock's P/CF looks attractive against its industry's average P/CF of 15.87. Within the past 12 months, ELY's P/CF has been as high as 25.29 and as low as 6.68, with a median of 17.12.

Value investors will likely look at more than just these metrics, but the above data helps show that Callaway Golf is likely undervalued currently. And when considering the strength of its earnings outlook, ELY sticks out at as one of the market's strongest value stocks.




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