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Are Investors Undervaluing Penn National Gaming (PENN) Right Now?

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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.

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 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.

One stock to keep an eye on is Penn National Gaming (PENN - Free Report) . PENN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 15.03 right now. For comparison, its industry sports an average P/E of 18.65. PENN's Forward P/E has been as high as 23.66 and as low as 10.99, with a median of 17.25, all within the past year.

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. PENN has a P/S ratio of 0.96. This compares to its industry's average P/S of 1.96.

These are only a few of the key metrics included in Penn National Gaming'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, PENN looks like an impressive value stock at the moment.


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