Should Value Investors Buy Strattec Security (STRT) Stock?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Strattec Security (STRT) is a stock many investors are watching right now. STRT is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
Investors should also recognize that STRT has a P/B ratio of 0.90. The P/B ratio is used to compare a stock's market value with 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 2.41. STRT's P/B has been as high as 1.23 and as low as 0.24, with a median of 0.46, 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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. STRT has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.81.
Finally, investors should note that STRT has a P/CF ratio of 6.45. 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 stock's P/CF looks attractive against its industry's average P/CF of 8.82. Over the past 52 weeks, STRT's P/CF has been as high as 10.34 and as low as 1.97, with a median of 6.36.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Strattec Security is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, STRT feels like a great value stock at the moment.
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