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Are Investors Undervaluing EnerSys (ENS) Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 EnerSys (ENS). ENS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 14.77, while its industry has an average P/E of 14.97. Over the past 52 weeks, ENS's Forward P/E has been as high as 16.23 and as low as 12.59, with a median of 14.08.

Investors should also note that ENS holds a PEG ratio of 1.48. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ENS's industry currently sports an average PEG of 1.56. Over the past 52 weeks, ENS's PEG has been as high as 2.56 and as low as 1.26, with a median of 1.48.

Investors should also recognize that ENS has a P/B ratio of 2.94. 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. ENS's current P/B looks attractive when compared to its industry's average P/B of 4.09. Over the past 12 months, ENS's P/B has been as high as 3.12 and as low as 2.32, with a median of 2.71.

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. ENS has a P/S ratio of 1.28. This compares to its industry's average P/S of 1.4.

These are only a few of the key metrics included in EnerSys's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ENS looks like an impressive value stock at the moment.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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