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Are investors currently undervaluing Oshkosh (OSK)?

Here at Zacks, we focus on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions, to find great stocks, but we always pay attention to the latest value, growth and momentum trends to highlight strong picks.

Given these trends, value investing is clearly one of the most popular methods for finding strong stocks in any type of market. Value investors use a variety of methods, including tried-and-tested valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific characteristics. For example, value investors will be interested in stocks with excellent grades in the Value category. When combined with a high Zacks Rank, “A” grades in the Value category are among the strongest value stocks on the market today.

A stock to keep an eye on is Oshkosh (OSK). OSK currently has a Zacks Rank of #2 (Buy) and a Value Grade of A. The stock is currently trading at a P/E ratio of 11.48. For comparison, the industry average is 17.22. Over the past 12 months, OSK’s Forward P/E ratio has been as high as 18.96 and as low as 10.44, with a median of 13.27.

Investors should also note that OSK has a PEG ratio of 0.53. This popular metric is similar to the widely known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. OSK’s PEG is comparable to its industry’s average PEG of 0.90. Over the past 12 months, OSK’s PEG has ranged between 0.99 and 0.39, with a median of 0.61.

Another valuation metric we should highlight is OSK’s P/B ratio of 1.60. The P/B ratio is used to compare a stock’s market value to its book value, which is defined as total assets minus total liabilities. This company’s current P/B ratio looks solid when compared to the industry average of 3. Over the past 52 weeks, OSK’s P/B ratio has ranged from 2.56 to 1.60, with a median of 2.16.

Value investors also use the P/S ratio. The P/S ratio is calculated by dividing price by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it might be a truer indicator of performance. OSK has a P/S ratio of 0.6. This compares to its industry’s average P/S ratio of 0.69.

These are just some of the numbers that went into Oshkosh’s great value rating. Still, they show that the stock is likely undervalued right now. Add this to the strong earnings outlook, and it’s clear that OSK is an impressive value stock right now.

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