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Should Value Investors Buy EchoStar (SATS) Stock?

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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.

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.

One stock to keep an eye on is EchoStar (SATS - Free Report) . SATS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SATS has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.71.

Finally, our model also underscores that SATS has a P/CF ratio of 5.68. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 6.57. SATS's P/CF has been as high as 8.65 and as low as 4.86, with a median of 6.90, all within the past year.

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


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