Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the “Value” category. When paired with a high Zacks Rank, “A” grades in the Value category are among the strongest value stocks on the market today.
Addus HomeCare (ADUS – Free Report) is a stock many investors are watching right now. ADUS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 14.82. This compares to its industry’s average Forward P/E of 19.42. Over the past year, ADUS’s Forward P/E has been as high as 24.54 and as low as 14.82, with a median of 22.07.
ADUS is also sporting a PEG ratio of 1.29. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company’s expected EPS growth rate. ADUS’s industry has an average PEG of 2.25 right now. ADUS’s PEG has been as high as 2.03 and as low as 1.09, with a median of 1.79, all within the past year.
Another notable valuation metric for ADUS is its P/B ratio of 1.69. 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 stock’s P/B looks attractive against its industry’s average P/B of 3.64. Over the past year, ADUS’s P/B has been as high as 2.72 and as low as 1.69, with a median of 2.40.
Finally, our model also underscores that ADUS has a P/CF ratio of 18.73. 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. This stock’s P/CF looks attractive against its industry’s average P/CF of 22.29. Within the past 12 months, ADUS’s P/CF has been as high as 28.20 and as low as 18.61, with a median of 24.43.
These are only a few of the key metrics included in Addus HomeCare’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, ADUS looks like an impressive value stock at the moment.
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