Is Brother Industries (BRTHY) Stock Undervalued Right Now?

Zacks
03-28

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Brother Industries (BRTHY). BRTHY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BRTHY has a P/S ratio of 0.84. This compares to its industry's average P/S of 1.14.

Finally, our model also underscores that BRTHY has a P/CF ratio of 8.44. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BRTHY's P/CF compares to its industry's average P/CF of 8.52. Over the past year, BRTHY's P/CF has been as high as 9.88 and as low as 6.79, with a median of 8.67.

These are just a handful of the figures considered in Brother Industries's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BRTHY is an impressive value stock right now.

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This article originally published on Zacks Investment Research (zacks.com).

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