While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
EZCORP (EZPW – Free Report) is a stock many investors are watching right now. EZPW is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
We should also highlight that EZPW has a P/B ratio of 0.82. The P/B ratio pits a stock’s market value against 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 1.02. Within the past 52 weeks, EZPW’s P/B has been as high as 0.87 and as low as 0.60, with a median of 0.75.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock’s price with the company’s revenue. This is a prefered metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. EZPW has a P/S ratio of 0.57. This compares to its industry’s average P/S of 1.32.
Value investors will likely look at more than just these metrics, but the above data helps show that EZCORP is likely undervalued currently. And when considering the strength of its earnings outlook, EZPW sticks out at as one of the market’s strongest value stocks.
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