The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
LCI Industries (LCII) is a stock many investors are watching right now. LCII is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 14.19 right now. For comparison, its industry sports an average P/E of 18.72. Over the last 12 months, 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 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 4.18. LCII's P/B has been as high as 2.27 and as low as 1.39, with a median of 1.86, over the past year.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. LCII has a P/S ratio of 0.56. This compares to its industry's average P/S of 0.71.
These figures are just a handful of the metrics value investors tend to look at, but they help show that LCI Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LCII feels like a great value stock at the moment.
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LCI Industries (LCII): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).