Should Value Investors Buy These Consumer Discretionary Stocks?

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 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 stock to keep an eye on is Brunswick (BC). BC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.14, which compares to its industry's average of 21.55. Over the last 12 months, BC's Forward P/E has been as high as 17.25 and as low as 10.05, with a median of 12.11.

Another valuation metric that we should highlight is BC's P/B ratio of 3.92. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 8.92. Within the past 52 weeks, BC's P/B has been as high as 5.56 and as low as 3.77, with a median of 4.47.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BC has a P/S ratio of 1.27. This compares to its industry's average P/S of 1.6.

Finally, our model also underscores that BC has a P/CF ratio of 9.71. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 20.19. Within the past 12 months, BC's P/CF has been as high as 16.10 and as low as 9.34, with a median of 10.83.

Investors could also keep in mind OneWater Marine (ONEW), an Leisure and Recreation Products stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

OneWater Marine also has a P/B ratio of 3.24 compared to its industry's price-to-book ratio of 8.92. Over the past year, its P/B ratio has been as high as 3.84, as low as 2.35, with a median of 2.93.

Value investors will likely look at more than just these metrics, but the above data helps show that Brunswick and OneWater Marine are likely undervalued currently. And when considering the strength of its earnings outlook, BC and ONEW sticks out as one of the market's strongest value stocks.

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Brunswick Corporation (BC) : Free Stock Analysis Report
 
OneWater Marine Inc. (ONEW) : Free Stock Analysis Report
 
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