Should Value Investors Buy CECO Environmental (CECE) 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.
CECO Environmental (CECE) is a stock many investors are watching right now. CECE is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 15.16, while its industry has an average P/E of 18.06. CECE's Forward P/E has been as high as 110.88 and as low as 11.38, with a median of 18.46, all within the past year.
We also note that CECE holds a PEG ratio of 1.01. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CECE's PEG compares to its industry's average PEG of 1.37. Within the past year, CECE's PEG has been as high as 7.39 and as low as 0.76, with a median of 1.24.
We should also highlight that CECE has a P/B ratio of 1.43. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.15. CECE's P/B has been as high as 1.67 and as low as 0.79, with a median of 1.40, 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. CECE has a P/S ratio of 0.75. This compares to its industry's average P/S of 0.77.
Value investors will likely look at more than just these metrics, but the above data helps show that CECO Environmental is likely undervalued currently. And when considering the strength of its earnings outlook, CECE sticks out at as one of the market's strongest value stocks.
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