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Are Investors Undervaluing Conn's (CONN) 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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company value investors might notice is Conn's (CONN - Free Report) . CONN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 16.47. This compares to its industry's average Forward P/E of 27.57. CONN's Forward P/E has been as high as 352.31 and as low as -72.79, with a median of 12.22, all within the past year.

Finally, investors will want to recognize that CONN has a P/CF ratio of 4.81. 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 current P/CF looks attractive when compared to its industry's average P/CF of 14.89. Over the past 52 weeks, CONN's P/CF has been as high as 9.02 and as low as 3.19, with a median of 5.52.

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


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