Should Value Investors Buy Harley-Davidson (HOG) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
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.
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 Harley-Davidson (HOG). HOG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
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. HOG has a P/S ratio of 1.23. This compares to its industry's average P/S of 1.3.
Finally, investors will want to recognize that HOG has a P/CF ratio of 7.64. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. HOG's current P/CF looks attractive when compared to its industry's average P/CF of 22.61. Over the past 52 weeks, HOG's P/CF has been as high as 23.94 and as low as 7.64, with a median of 14.67.
Value investors will likely look at more than just these metrics, but the above data helps show that Harley-Davidson is likely undervalued currently. And when considering the strength of its earnings outlook, HOG sticks out at as one of the market's strongest value stocks.
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HarleyDavidson, Inc. (HOG): Free Stock Analysis Report
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