Should Value Investors Buy Heidrick & Struggles (HSII) Stock?

HSII

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Heidrick & Struggles (HSII - Free Report) is a stock many investors are watching right now. HSII is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.

HSII is also sporting a PEG ratio of 1.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HSII's PEG compares to its industry's average PEG of 1.49. Over the past 52 weeks, HSII's PEG has been as high as 1.77 and as low as 0.91, with a median of 1.24.

Investors should also recognize that HSII has a P/B ratio of 2.82. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. HSII's current P/B looks attractive when compared to its industry's average P/B of 3.03. Over the past year, HSII's P/B has been as high as 3.55 and as low as 2.13, with a median of 2.76.

Finally, we should also recognize that HSII has a P/CF ratio of 12.46. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 12.53. Over the past 52 weeks, HSII's P/CF has been as high as 200.30 and as low as -30.30, with a median of 13.58.

These are just a handful of the figures considered in Heidrick & Struggles's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that HSII is an impressive value stock right now.

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