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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Polaris (PII) is a stock many investors are watching right now. PII is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 63.95 right now. For comparison, its industry sports an average P/E of 96.73. Over the past 52 weeks, PII's Forward P/E has been as high as 268.23 and as low as -274.34, with a median of 17.77.
Investors will also notice that PII has a PEG ratio of 3.04. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PII's PEG compares to its industry's average PEG of 7.48. PII's PEG has been as high as 12.82 and as low as 3.04, with a median of 6.01, all within 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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PII has a P/S ratio of 0.54. This compares to its industry's average P/S of 0.66.
Value investors will likely look at more than just these metrics, but the above data helps show that Polaris is likely undervalued currently. And when considering the strength of its earnings outlook, PII sticks out as one of the market's strongest value stocks.
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Polaris Inc. (PII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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