Yahoo Finance Should Value Investors Buy Hanesbrands (HBI) Stock?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Hanesbrands (HBI). HBI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.70, which compares to its industry's average of 13.10. HBI's Forward P/E has been as high as 37.17 and as low as 5.89, with a median of 8.24, all within the past year.
Investors should also recognize that HBI has a P/B ratio of 5.14. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 6.07. Over the past year, HBI's P/B has been as high as 5.97 and as low as 3.31, with a median of 4.85.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. HBI has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.65.
Finally, we should also recognize that HBI has a P/CF ratio of 18.71. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 26.19. Within the past 12 months, HBI's P/CF has been as high as 21.74 and as low as -9.81, with a median of -3.33.
These are only a few of the key metrics included in Hanesbrands's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HBI looks like an impressive value stock at the moment.
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Hanesbrands Inc. (HBI) : Free Stock Analysis Report