Back to top

Image: Bigstock

Is Huntington Ingalls (HII) a Great Value Stock Right Now?

Read MoreHide Full Article

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Huntington Ingalls (HII - Free Report) . HII is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.12, while its industry has an average P/E of 23.14. Over the past 52 weeks, HII's Forward P/E has been as high as 18.34 and as low as 8.12, with a median of 13.67.

Investors should also recognize that HII has a P/B ratio of 4.04. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 12.11. Over the past 12 months, HII's P/B has been as high as 7.17 and as low as 4.04, with a median of 5.79.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HII has a P/S ratio of 0.74. This compares to its industry's average P/S of 0.83.

Finally, our model also underscores that HII has a P/CF ratio of 8.01. 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. HII's P/CF compares to its industry's average P/CF of 18.35. HII's P/CF has been as high as 14.24 and as low as 8.01, with a median of 10.44, all within the past year.

These are just a handful of the figures considered in Huntington Ingalls'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 HII is an impressive value stock right now.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Huntington Ingalls Industries, Inc. (HII) - free report >>

Published in