Should Value Investors Buy Strattec Security (STRT) Stock?
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Strattec Security (STRT). STRT is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 13.23, while its industry has an average P/E of 22.77. STRT's Forward P/E has been as high as 18.24 and as low as 4.41, with a median of 11.23, all within the past year.
STRT is also sporting a PEG ratio of 0.88. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. STRT's PEG compares to its industry's average PEG of 1.94. Within the past year, STRT's PEG has been as high as 1.22 and as low as 0.29, with a median of 0.75.
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 0.17. This compares to its industry's average P/S of 0.42.
Finally, our model also underscores that STRT has a P/CF ratio of 3.93. 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. STRT's current P/CF looks attractive when compared to its industry's average P/CF of 8.82. Within the past 12 months, STRT's P/CF has been as high as 656.99 and as low as -64.23, with a median of 2.93.
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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