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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 stock to keep an eye on is Polaris (PII). PII is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 63.95. This compares to its industry's average Forward P/E of 78.57. PII's Forward P/E has been as high as 268.23 and as low as -274.34, with a median of 17.77, all within the past year.
PII is also sporting a PEG ratio of 3.04. 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. PII's industry currently sports an average PEG of 5.80. Over the last 12 months, PII's PEG has been as high as 12.82 and as low as 3.04, with a median of 6.01.
Another notable valuation metric for PII is its P/B ratio of 2.62. 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 5.69. Over the past 12 months, PII's P/B has been as high as 3.56 and as low as 1.46, with a median of 2.36.
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 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 0.48. This compares to its industry's average P/S of 0.68.
These are just a handful of the figures considered in Polaris's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PII is an impressive value stock right now.
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Polaris Inc. (PII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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