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Should Value Investors Buy Conn's (CONN) 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.

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.

Conn's (CONN - Free Report) is a stock many investors are watching right now. CONN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 15.57 right now. For comparison, its industry sports an average P/E of 18.98. CONN's Forward P/E has been as high as 2,164.50 and as low as -9,841.58, with a median of 4.10, all within the past year.

Finally, our model also underscores that CONN has a P/CF ratio of 4.63. 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. CONN's P/CF compares to its industry's average P/CF of 6.82. Within the past 12 months, CONN's P/CF has been as high as 6.79 and as low as 0.75, with a median of 4.12.

These are only a few of the key metrics included in Conn's'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, CONN looks like an impressive value stock at the moment.


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