Back to top

Image: Bigstock

Is Convergys (CVG) a Great Value Stock Right Now?

Read MoreHide Full Article

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.

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.

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.

One stock to keep an eye on is Convergys . CVG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 14.27, while its industry has an average P/E of 22.50. Over the past year, CVG's Forward P/E has been as high as 15 and as low as 11.50, with a median of 13.44.

Investors will also notice that CVG has a PEG ratio of 1.59. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CVG's PEG compares to its industry's average PEG of 2.18. Over the past 52 weeks, CVG's PEG has been as high as 1.67 and as low as 1.21, with a median of 1.45.

Finally, we should also recognize that CVG has a P/CF ratio of 11.31. 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. CVG's P/CF compares to its industry's average P/CF of 18.60. CVG's P/CF has been as high as 11.86 and as low as 8.04, with a median of 9.12, all within the past year.

These are only a few of the key metrics included in Convergys'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, CVG looks like an impressive value stock at the moment.