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Are Investors Undervaluing Ford (F) Right Now?


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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Ford (F) is a stock many investors are watching right now. F is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.56, which compares to its industry’s average of 10.18. Over the past 52 weeks, F’s Forward P/E has been as high as 8.68 and as low as 5.67, with a median of 7.15.

Investors should also note that F holds a PEG ratio of 1.24. 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. F’s industry has an average PEG of 1.39 right now. Over the past 52 weeks, F’s PEG has been as high as 1.43 and as low as 0.63, with a median of 0.83.

Investors should also recognize that F has a P/B ratio of 0.90. 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 2.37. Over the past year, F’s P/B has been as high as 1.51 and as low as 0.83, with a median of 1.19.

Finally, investors should note that F has a P/CF ratio of 2.27. This data point considers a firm’s operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company’s current P/CF looks solid when compared to its industry’s average P/CF of 6.25. Over the past year, F’s P/CF has been as high as 3.30 and as low as 2.09, with a median of 2.65.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Ford is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, F feels like a great value stock at the moment.

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