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Why Trane Technologies (TT) is a Top Value Stock for the Long-Term

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For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.

Achieving those goals is made easier with the Zacks Style Scores, a unique set of guidelines that rates stocks based on popular investing methodologies, namely value, growth, and momentum. The Style Scores can help you narrow down which stocks are better for your portfolio and which ones can beat the market over the long-term.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

Trane Technologies (TT)

Founded in 1885 and headquartered in Swords, Ireland, Trane Technologies is a designer, manufacturer, seller and servicer of climate control products for heating, ventilation, air conditioning and transport solutions. The company distributes its products through branch sales offices, dealers and distributors in the United States and through subsidiary sales and service companies in other parts of the world. Trane generated around 72% of its revenues from the United States and rest from more than 100 other countries. With no customer accounting for more than 10% of revenues, the company’s business does not depend on any single customer of group of customers.

TT is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of B. Shares are currently trading at a forward P/E of 18.6X for the current fiscal year compared to the Technology Services industry's P/E of 19.6X. Additionally, TT has a PEG Ratio of 1.4 and a Price/Cash Flow ratio of 17.6X. Value investors should also note TT's Price/Sales ratio of 2.1X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2022. The Zacks Consensus Estimate has increased $0.01 to $7.07 per share. TT has an average earnings surprise of 3.4%.

TT should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.


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