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Should Value Investors Buy Polaris (PII) Stock?

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 value investors might notice is Polaris (PII). PII is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.


Another notable valuation metric for PII is its P/B ratio of 3.22. 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 attractive against its industry's average P/B of 3.80. Over the past year, PII's P/B has been as high as 6.22 and as low as 3.14, with a median of 3.78.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PII has a P/S ratio of 0.54. This compares to its industry's average P/S of 1.01.

Finally, our model also underscores that PII has a P/CF ratio of 6.90. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. PII's P/CF compares to its industry's average P/CF of 15.98. Over the past 52 weeks, PII's P/CF has been as high as 9.60 and as low as 5.64, with a median of 6.97.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Polaris is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PII feels like a great value stock at the moment.

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