Back to top

Image: Bigstock

Should Value Investors Buy Sportsman's Warehouse (SPWH) Stock?

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Sportsman's Warehouse (SPWH - Free Report) . SPWH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 11.38 right now. For comparison, its industry sports an average P/E of 12.94. Over the last 12 months, SPWH's Forward P/E has been as high as 13.80 and as low as 6.30, with a median of 9.80.

Investors should also note that SPWH holds a PEG ratio of 0.80. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SPWH's PEG compares to its industry's average PEG of 1.34. Over the past 52 weeks, SPWH's PEG has been as high as 0.92 and as low as 0.63, with a median of 0.73.

Investors should also recognize that SPWH has a P/B ratio of 2.91. The P/B ratio is used to compare a stock's market value with 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 3.35. Within the past 52 weeks, SPWH's P/B has been as high as 3.74 and as low as 1.69, with a median of 2.44.

Finally, investors will want to recognize that SPWH has a P/CF ratio of 8.14. 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. This stock's P/CF looks attractive against its industry's average P/CF of 8.59. SPWH's P/CF has been as high as 9.35 and as low as 3.39, with a median of 6.43, all within the past year.

These are only a few of the key metrics included in Sportsman's Warehouse's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SPWH looks like an impressive value stock at the moment.

In-Depth Zacks Research for the Tickers Above

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

Sportsmans Warehouse Holdings, Inc. (SPWH) - free report >>

Published in