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Should Value Investors Buy GP Strategies (GPX) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.

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.

GP Strategies is a stock many investors are watching right now. GPX is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 15.63, which compares to its industry's average of 37.75. Over the past year, GPX's Forward P/E has been as high as 30.69 and as low as 6.58, with a median of 18.50.

GPX is also sporting a PEG ratio of 1.04. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GPX's industry currently sports an average PEG of 2.73. Over the last 12 months, GPX's PEG has been as high as 2.05 and as low as 0.44, with a median of 1.23.

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. GPX has a P/S ratio of 0.59. This compares to its industry's average P/S of 1.2.

These are only a few of the key metrics included in GP Strategies'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, GPX looks like an impressive value stock at the moment.

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