Should Value Investors Buy CSG Systems (CSGS) Stock?

CSGS

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

CSG Systems (CSGS - Free Report) is a stock many investors are watching right now. CSGS is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 10.68 right now. For comparison, its industry sports an average P/E of 17.58. Over the last 12 months, CSGS's Forward P/E has been as high as 17.51 and as low as 10.68, with a median of 14.11.

Finally, we should also recognize that CSGS has a P/CF ratio of 9.23. 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. CSGS's current P/CF looks attractive when compared to its industry's average P/CF of 12.26. Over the past year, CSGS's P/CF has been as high as 14.95 and as low as 9.23, with a median of 13.16.

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

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