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.
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 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.
American Outdoor Brands (AOUT) is a stock many investors are watching right now. AOUT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 15.38, which compares to its industry's average of 28.29. AOUT's Forward P/E has been as high as 28.21 and as low as 12.52, with a median of 15.71, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. AOUT has a P/S ratio of 0.68. This compares to its industry's average P/S of 0.92.
Finally, we should also recognize that AOUT has a P/CF ratio of 15.33. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AOUT's P/CF compares to its industry's average P/CF of 24.60. Over the past year, AOUT's P/CF has been as high as 31.98 and as low as 13.93, with a median of 24.22.
These figures are just a handful of the metrics value investors tend to look at, but they help show that American Outdoor Brands is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AOUT feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
American Outdoor Brands, Inc. (AOUT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
