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Are Investors Undervaluing Winnebago Industries (WGO) Right Now?

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...

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This story originally appeared on Zacks

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is Winnebago Industries (WGO). WGO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.23, while its industry has an average P/E of 9.89. Over the last 12 months, WGO's Forward P/E has been as high as 14.37 and as low as 7.22, with a median of 10.34.

Investors should also recognize that WGO has a P/B ratio of 2.08. 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. WGO's current P/B looks attractive when compared to its industry's average P/B of 2.84. Within the past 52 weeks, WGO's P/B has been as high as 3.12 and as low as 1.84, with a median of 2.41.

Finally, investors will want to recognize that WGO has a P/CF ratio of 7.09. 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. WGO's P/CF compares to its industry's average P/CF of 13.35. Over the past 52 weeks, WGO's P/CF has been as high as 16.93 and as low as 7.08, with a median of 12.65.

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



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