Are Investors Undervaluing Harte Hanks (HHS) Right Now?

HHS

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Harte Hanks (HHS - Free Report) is a stock many investors are watching right now. HHS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 5.97, while its industry has an average P/E of 9.76. HHS's Forward P/E has been as high as 11.65 and as low as 4.25, with a median of 6.67, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. HHS has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.84.

Finally, investors will want to recognize that HHS has a P/CF ratio of 4.19. 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 10.34. Over the past 52 weeks, HHS's P/CF has been as high as 8.58 and as low as 2.50, with a median of 3.50.

Value investors will likely look at more than just these metrics, but the above data helps show that Harte Hanks is likely undervalued currently. And when considering the strength of its earnings outlook, HHS sticks out at as one of the market's strongest value stocks.

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