Should Value Investors Buy The ONE Group Hospitality (STKS) Stock?

STKS

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

The ONE Group Hospitality (STKS - Free Report) is a stock many investors are watching right now. STKS is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. STKS has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.94.

Finally, our model also underscores that STKS has a P/CF ratio of 7.99. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.37. STKS's P/CF has been as high as 10.98 and as low as 5.19, with a median of 8.50, all within the past year.

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

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