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Is Parker-Hannifin (PH) a Great Value Stock 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Parker-Hannifin (PH - Free Report) . PH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 19.09 right now. For comparison, its industry sports an average P/E of 21.58. PH's Forward P/E has been as high as 21.62 and as low as 8.83, with a median of 16.03, all within the past year.

Investors should also note that PH holds a PEG ratio of 1.62. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PH's industry currently sports an average PEG of 2.03. Over the last 12 months, PH's PEG has been as high as 2.08 and as low as 0.90, with a median of 1.64.

Another valuation metric that we should highlight is PH's P/B ratio of 3.69. The P/B ratio pits a stock's market value against 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. PH's P/B has been as high as 4.41 and as low as 1.97, with a median of 3.76, over the past year.

Finally, investors should note that PH has a P/CF ratio of 12.94. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.84. Over the past year, PH's P/CF has been as high as 15.31 and as low as 6.94, with a median of 12.12.

These are only a few of the key metrics included in Parker-Hannifin'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, PH looks like an impressive value stock at the moment.


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