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.
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 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.
CECO Environmental (CECE) is a stock many investors are watching right now. CECE is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 17.35. This compares to its industry's average Forward P/E of 18.71. Over the last 12 months, CECE's Forward P/E has been as high as 110.88 and as low as 7.34, with a median of 18.46.
CECE is also sporting a PEG ratio of 1.16. 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. CECE's industry has an average PEG of 1.44 right now. CECE's PEG has been as high as 7.39 and as low as 0.49, with a median of 1.24, all within the past year.
Another valuation metric that we should highlight is CECE's P/B ratio of 1.46. Investors use the P/B ratio to look at a stock's market value versus 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 4.29. Within the past 52 weeks, CECE's P/B has been as high as 1.67 and as low as 0.76, with a median of 1.37.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CECE has a P/S ratio of 0.81. This compares to its industry's average P/S of 0.83.
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.
CECO Environmental Corp. (CECE): Free Stock Analysis Report
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Zacks Investment Research