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Should Value Investors Consider Crane Company (CR) Stock?
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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 8.4, as you can see in the chart below:
This level also compares quite favorably with the market at large, as the PE for the S&P 500 stands at about 17.09. Meanwhile, if we focus on the long-term PE trend, Crane Company’s current PE level puts it much below its midpoint of 14.38 over the past five years.
The stock’s PE also compares very favorably with the Conglomerates Market’s trailing twelve months PE ratio, which stands at 17.53. This indicates that the stock is quite undervalued right now, compared to its peers.
We should also point out Crane Company has a forward PE ratio (price relative to this year’s earnings) of 9.13, so it is fair to expect an increase in share price in the near term.
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 just 0.92. This is much lower than the S&P 500 average, which comes in at 2.97 right now. Also, as we can see in the chart below, this is somewhat 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 A, putting it into the top 20% 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 B 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 downbeat. While the current-quarter estimate has seen no upward and one downward movement, the current-year estimate has seen no upward and two downward movements over the past two months.
This has had a negative effect on the consensus estimate. While the current-quarter consensus has plunged 21.5% over the past two months, the current-year estimate has decreased 0.9%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Despite this bearish trend, the stock has a Zacks Rank #3 (Hold) and it is the reason why we are looking for inline 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. Besides a sluggish industry rank (among bottom 15% 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:
Hence, value investors might want to wait for Zacks Rank, past industry performance, industry rank and analyst sentiments to turn around in the name first, but once that happens, the stock is going to be a compelling pick.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Should Value Investors Consider Crane Company (CR) Stock?
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 8.4, as you can see in the chart below:
This level also compares quite favorably with the market at large, as the PE for the S&P 500 stands at about 17.09. Meanwhile, if we focus on the long-term PE trend, Crane Company’s current PE level puts it much below its midpoint of 14.38 over the past five years.
The stock’s PE also compares very favorably with the Conglomerates Market’s trailing twelve months PE ratio, which stands at 17.53. This indicates that the stock is quite undervalued right now, compared to its peers.
We should also point out Crane Company has a forward PE ratio (price relative to this year’s earnings) of 9.13, so it is fair to expect an increase in share price in the near term.
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 just 0.92. This is much lower than the S&P 500 average, which comes in at 2.97 right now. Also, as we can see in the chart below, this is somewhat 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 A, putting it into the top 20% 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 B 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 downbeat. While the current-quarter estimate has seen no upward and one downward movement, the current-year estimate has seen no upward and two downward movements over the past two months.
This has had a negative effect on the consensus estimate. While the current-quarter consensus has plunged 21.5% over the past two months, the current-year estimate has decreased 0.9%. 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 this bearish trend, the stock has a Zacks Rank #3 (Hold) and it is the reason why we are looking for inline 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. Besides a sluggish industry rank (among bottom 15% 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:
Hence, value investors might want to wait for Zacks Rank, past industry performance, industry rank and analyst sentiments to turn around in the name first, but once that happens, the stock is going to be a compelling pick.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>