Should Value Investors Buy Winnebago Industries (WGO) 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 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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Winnebago Industries (WGO). WGO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.27. This compares to its industry's average Forward P/E of 11.32. Over the last 12 months, WGO's Forward P/E has been as high as 14.37 and as low as 7.97, with a median of 10.63.
Another valuation metric that we should highlight is WGO's P/B ratio of 2.53. The P/B ratio is used to compare a stock's market value with 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 3.18. Over the past year, WGO's P/B has been as high as 3.12 and as low as 1.84, with a median of 2.42.
Finally, investors will want to recognize that WGO has a P/CF ratio of 9.46. 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. WGO's current P/CF looks attractive when compared to its industry's average P/CF of 14.94. Over the past year, WGO's P/CF has been as high as 18.11 and as low as 7.79, with a median of 13.12.
Value investors will likely look at more than just these metrics, but the above data helps show that Winnebago Industries is likely undervalued currently. And when considering the strength of its earnings outlook, WGO sticks out at as one of the market's strongest value stocks.
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Winnebago Industries, Inc. (WGO): Free Stock Analysis Report
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