Back to top

Image: Bigstock

Are Investors Undervaluing Applied Industrial Technologies (AIT) Right Now?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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

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.

Applied Industrial Technologies (AIT - Free Report) is a stock many investors are watching right now. AIT is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 18.10, while its industry has an average P/E of 21.61. AIT's Forward P/E has been as high as 20.82 and as low as 7.04, with a median of 13.70, all within the past year.

We also note that AIT holds a PEG ratio of 0.92. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AIT's industry currently sports an average PEG of 2.03.

Investors should also recognize that AIT has a P/B ratio of 2.76. 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 company's current P/B looks solid when compared to its industry's average P/B of 5.61. Over the past year, AIT's P/B has been as high as 3.18 and as low as 1.29, with a median of 2.51.

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. AIT has a P/S ratio of 0.68. This compares to its industry's average P/S of 1.06.

Finally, investors should note that AIT has a P/CF ratio of 9.92. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AIT's current P/CF looks attractive when compared to its industry's average P/CF of 16.84. Within the past 12 months, AIT's P/CF has been as high as 12.02 and as low as 5.47, with a median of 9.58.

These are just a handful of the figures considered in Applied Industrial Technologies'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 AIT 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:

Applied Industrial Technologies, Inc. (AIT) - free report >>

Published in