Is Smith & Wesson Brands, Inc. (SWBI) Stock Undervalued Right Now? (Revised)
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Smith & Wesson Brands, Inc. SWBI. SWBI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
Investors should also recognize that SWBI has a P/B ratio of 5.22. 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. Within the past 52 weeks, SWBI's P/B has been as high as 5.55 and as low as 0.73, with a median of 2.15.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SWBI has a P/S ratio of 1.3. This compares to its industry's average P/S of 1.87.
These are just a handful of the figures considered in Smith & Wesson Brands'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 SWBI is an impressive value stock right now.
(Note: We are reissuing this article to correct a mistake. The original article, issued on January 15, 2021, should no longer be relied upon.)
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