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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system’s “Value” category. Stocks with both “A” grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Ziff Davis (ZD – Free Report) . ZD is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ZD has a P/S ratio of 1.28. This compares to its industry’s average P/S of 3.73.
Finally, we should also recognize that ZD has a P/CF ratio of 5.13. This data point considers a firm’s operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company’s current P/CF looks solid when compared to its industry’s average P/CF of 13.75. Within the past 12 months, ZD’s P/CF has been as high as 9.34 and as low as 4.80, with a median of 6.64.
These are just a handful of the figures considered in Ziff Davis’s great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ZD is an impressive value stock right now.
Financial Market Newsflash
No financial news published today. Check back later.
