Are Investors Undervaluing Acco Brands (ACCO) Right Now?
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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 company to watch right now is Acco Brands (ACCO). ACCO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.40. This compares to its industry's average Forward P/E of 10.65. Over the last 12 months, ACCO's Forward P/E has been as high as 8.41 and as low as 4.83, with a median of 6.84.
ACCO is also sporting a PEG ratio of 1.06. 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. ACCO's PEG compares to its industry's average PEG of 1.41. Over the last 12 months, ACCO's PEG has been as high as 1.11 and as low as 0.48, with a median of 0.68.
Another notable valuation metric for ACCO is its P/B ratio of 1.20. 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 attractive against its industry's average P/B of 2.18. Over the past 12 months, ACCO's P/B has been as high as 1.72 and as low as 0.86, with a median of 1.14.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ACCO has a P/S ratio of 0.48. This compares to its industry's average P/S of 1.31.
Finally, investors will want to recognize that ACCO has a P/CF ratio of 5.45. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ACCO's P/CF compares to its industry's average P/CF of 10.34. ACCO's P/CF has been as high as 6.04 and as low as 3.05, with a median of 4.98, 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 Acco Brands is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ACCO feels like a great value stock at the moment.
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