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Is Telephone & Data Systems (TDS) Stock Undervalued Right Now?

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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Telephone & Data Systems (TDS - Free Report) . TDS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 15.06, which compares to its industry's average of 20.37. Over the last 12 months, TDS's Forward P/E has been as high as 29.25 and as low as 13.61, with a median of 18.29.

Finally, our model also underscores that TDS has a P/CF ratio of 1.92. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 2.07. Over the past year, TDS's P/CF has been as high as 2.78 and as low as 1.68, with a median of 2.02.

These are only a few of the key metrics included in Telephone & Data Systems'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, TDS looks like an impressive value stock at the moment.


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