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Is Crane Company (CR) a Profitable Stock for Value Investors?
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Crane Company (CR - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Crane Company has a trailing twelve months PE ratio of 13.03, as you can see in the chart below:
This level actually compares quite favorably with the market at large, as the PE for the S&P 500 stands at about 18.47. Also, if we focus on the long-term PE trend, Crane Company’s current PE level puts it below its midpoint of 14.42 over the past five years.
The stock’s PE also compares quite favorably with the Conglomerates Market’s trailing twelve months PE ratio, which stands at 20.83. This indicates that the stock is undervalued right now, compared to its peers.
Meanwhile, Crane Company has a forward PE ratio (price relative to this year’s earnings) of 12.92, which is lower than the current level. So, so it is fair to say that a slightly more value-oriented path may be ahead for Crane Company stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Crane Company has a P/S ratio of 1.48. This is quite lower than the S&P 500 average, which comes in at 3.26x right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, Crane Company currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes Crane Company a solid choice for value investors.
What About the Stock Overall?
Though Crane Company might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of A and a Momentum Score of C. This gives CR a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been discouraging. The current quarter has seen three estimates go down in the past sixty days compared to no upward revisions, while the full year estimate has seen three down and one up in the same time period.
This has had a negative effect on the consensus estimate. While the current-quarter consensus estimate has dipped 6.1% over the past two months, the full-year estimate has inched down 0.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Despite such bearish analyst sentiments, the stock has a Zacks Rank #3 (Hold) and it is the reason why we are looking for in line performance from the company in the near term.
Bottom Line
Crane Company is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Despite a strong industry rank (among Top 7% of more than 250 industries), with a Zacks Rank #3 it is hard to get too excited about the stock.
Also, over the past two years, the broader industry has clearly underperformed the market at large, as you can see below:
So, value investors might want to wait for analyst sentiments and Zacks rank to turn around in this name first, but once that happens, this stock could be a compelling pick.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Is Crane Company (CR) a Profitable Stock for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Crane Company (CR - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Crane Company has a trailing twelve months PE ratio of 13.03, as you can see in the chart below:
This level actually compares quite favorably with the market at large, as the PE for the S&P 500 stands at about 18.47. Also, if we focus on the long-term PE trend, Crane Company’s current PE level puts it below its midpoint of 14.42 over the past five years.
The stock’s PE also compares quite favorably with the Conglomerates Market’s trailing twelve months PE ratio, which stands at 20.83. This indicates that the stock is undervalued right now, compared to its peers.
Meanwhile, Crane Company has a forward PE ratio (price relative to this year’s earnings) of 12.92, which is lower than the current level. So, so it is fair to say that a slightly more value-oriented path may be ahead for Crane Company stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Crane Company has a P/S ratio of 1.48. This is quite lower than the S&P 500 average, which comes in at 3.26x right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, Crane Company currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes Crane Company a solid choice for value investors.
What About the Stock Overall?
Though Crane Company might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of A and a Momentum Score of C. This gives CR a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been discouraging. The current quarter has seen three estimates go down in the past sixty days compared to no upward revisions, while the full year estimate has seen three down and one up in the same time period.
This has had a negative effect on the consensus estimate. While the current-quarter consensus estimate has dipped 6.1% over the past two months, the full-year estimate has inched down 0.3%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Crane Company Price and Consensus
Crane Company price-consensus-chart | Crane Company Quote
Despite such bearish analyst sentiments, the stock has a Zacks Rank #3 (Hold) and it is the reason why we are looking for in line performance from the company in the near term.
Bottom Line
Crane Company is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Despite a strong industry rank (among Top 7% of more than 250 industries), with a Zacks Rank #3 it is hard to get too excited about the stock.
Also, over the past two years, the broader industry has clearly underperformed the market at large, as you can see below:
So, value investors might want to wait for analyst sentiments and Zacks rank to turn around in this name first, but once that happens, this stock could be a compelling pick.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>