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Are Investors Undervaluing Winnebago Industries (WGO) 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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company value investors might notice is Winnebago Industries (WGO - Free Report) . WGO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.92. This compares to its industry's average Forward P/E of 15.55. WGO's Forward P/E has been as high as 12.70 and as low as 7.08, with a median of 9.20, all within the past year.

Investors will also notice that WGO has a PEG ratio of 0.54. 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. WGO's PEG compares to its industry's average PEG of 1.10. Over the past 52 weeks, WGO's PEG has been as high as 0.58 and as low as 0.35, with a median of 0.43.

Investors should also recognize that WGO has a P/B ratio of 2.09. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. WGO's current P/B looks attractive when compared to its industry's average P/B of 2.70. Within the past 52 weeks, WGO's P/B has been as high as 2.57 and as low as 1.53, with a median of 1.92.

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. WGO has a P/S ratio of 0.79. This compares to its industry's average P/S of 1.32.

Finally, investors will want to recognize that WGO has a P/CF ratio of 12.80. 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. WGO's current P/CF looks attractive when compared to its industry's average P/CF of 17.89. Over the past 52 weeks, WGO's P/CF has been as high as 13.18 and as low as 6.55, with a median of 8.62.

These are just a handful of the figures considered in Winnebago Industries's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that WGO is an impressive value stock right now.


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