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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One stock to keep an eye on is Winnebago Industries (WGO). WGO is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 13.26 right now. For comparison, its industry sports an average P/E of 20.09. WGO's Forward P/E has been as high as 24.53 and as low as 7.65, with a median of 11.38, all within the past year.
Another valuation metric that we should highlight is WGO's P/B ratio of 0.76. 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 1.99. WGO's P/B has been as high as 1.48 and as low as 0.65, with a median of 0.84, 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. WGO has a P/S ratio of 0.46. This compares to its industry's average P/S of 1.24.
Finally, investors will want to recognize that WGO has a P/CF ratio of 12.07. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.01. WGO's P/CF has been as high as 21.92 and as low as 9.14, with a median of 12.80, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Winnebago Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, WGO feels like a great value stock at the moment.
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Winnebago Industries, Inc. (WGO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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