Are Investors Undervaluing LCI Industries (LCII) Right Now?

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is LCI Industries (LCII). LCII is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.19, which compares to its industry's average of 19.40. Over the past 52 weeks, LCII's Forward P/E has been as high as 19.04 and as low as 10.65, with a median of 14.77.

We should also highlight that LCII has a P/B ratio of 1.78. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.30. Over the past year, LCII's P/B has been as high as 2.27 and as low as 1.39, with a median of 1.86.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. LCII has a P/S ratio of 0.54. This compares to its industry's average P/S of 0.71.

These are only a few of the key metrics included in LCI Industries'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, LCII looks like an impressive value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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