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Should Value Investors Buy Consumer Portfolio Services (CPSS) Stock?

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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 Consumer Portfolio Services (CPSS - Free Report) . CPSS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 5.06, while its industry has an average P/E of 10.03. Over the past 52 weeks, CPSS's Forward P/E has been as high as 6.81 and as low as 4.25, with a median of 5.97.

Finally, we should also recognize that CPSS has a P/CF ratio of 3.16. 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 stock's P/CF looks attractive against its industry's average P/CF of 6.58. Over the past year, CPSS's P/CF has been as high as 8.26 and as low as 2.73, with a median of 6.76.

These are only a few of the key metrics included in Consumer Portfolio Services'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, CPSS looks like an impressive value stock at the moment.


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