Are Investors Undervaluing Kion Group (KIGRY) Right Now?

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company to watch right now is Kion Group (KIGRY). KIGRY is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 17.85 right now. For comparison, its industry sports an average P/E of 26.14. Over the last 12 months, KIGRY's Forward P/E has been as high as 19.07 and as low as 9.39, with a median of 13.54.

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. KIGRY has a P/S ratio of 0.74. This compares to its industry's average P/S of 1.22.

Investors could also keep in mind ScanSource (SCSC), another Industrial Services stock with a Zacks Rank of #2 (Buy) and Value grade of A.

ScanSource is currently trading with a Forward P/E ratio of 10.75 while its PEG ratio sits at 0.72. Both of the company's metrics compare favorably to its industry's average P/E of 26.14 and average PEG ratio of 2.10.

Over the past year, SCSC's P/E has been as high as 15.41, as low as 8.09, with a median of 11.21; its PEG ratio has been as high as 1.54, as low as 0.71, with a median of 1.12 during the same time period.

Additionally, ScanSource has a P/B ratio of 1.09 while its industry's price-to-book ratio sits at 16.65. For SCSC, this valuation metric has been as high as 1.39, as low as 0.77, with a median of 1.08 over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Kion Group and ScanSource are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KIGRY and SCSC feels like a great value stock at the moment.

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

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