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.
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 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.
One stock to keep an eye on is Primoris Services (PRIM – Free Report) . PRIM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 14.73, which compares to its industry’s average of 16.35. PRIM’s Forward P/E has been as high as 22.17 and as low as 13.97, with a median of 17.55, all within the past year.
Another notable valuation metric for PRIM is its P/B ratio of 2.46. The P/B ratio is used to compare a stock’s market value with 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 3.37. PRIM’s P/B has been as high as 3.39 and as low as 1.72, with a median of 2.33, over the past year.
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. PRIM has a P/S ratio of 0.54. This compares to its industry’s average P/S of 0.78.
Finally, investors will want to recognize that PRIM has a P/CF ratio of 12.78. 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. PRIM’s current P/CF looks attractive when compared to its industry’s average P/CF of 15.32. Within the past 12 months, PRIM’s P/CF has been as high as 17.64 and as low as 9.28, with a median of 12.01.
These are just a handful of the figures considered in Primoris Services’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 PRIM is an impressive value stock right now.
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