Is Strattec Security (STRT) Stock Undervalued Right Now?

Zacks
2024-10-17

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.

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.

Strattec Security (STRT) is a stock many investors are watching right now. STRT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors should also recognize that STRT has a P/B ratio of 0.67. 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. STRT's current P/B looks attractive when compared to its industry's average P/B of 1.68. STRT's P/B has been as high as 0.78 and as low as 0.40, with a median of 0.45, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. STRT has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.63.

Value investors will likely look at more than just these metrics, but the above data helps show that Strattec Security is likely undervalued currently. And when considering the strength of its earnings outlook, STRT sticks out at as one of the market's strongest value stocks.

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