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Is Brunswick (BC) Stock Undervalued 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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.

One stock to keep an eye on is Brunswick (BC - Free Report) . BC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.35, which compares to its industry's average of 15.53. Over the past year, BC's Forward P/E has been as high as 12.20 and as low as 8.07, with a median of 9.81.

Another valuation metric that we should highlight is BC's P/B ratio of 2.86. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. BC's current P/B looks attractive when compared to its industry's average P/B of 6.73. Over the past 12 months, BC's P/B has been as high as 3.50 and as low as 2.37, with a median of 2.76.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. BC has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.1.

Finally, we should also recognize that BC has a P/CF ratio of 14.53. 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 17.36. Over the past 52 weeks, BC's P/CF has been as high as 24.56 and as low as 9.54, with a median of 13.25.

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


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