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Is Sterling Construction (STRL) a Great Value Stock Right Now?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Sterling Construction (STRL - Free Report) is a stock many investors are watching right now. STRL is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.82. This compares to its industry's average Forward P/E of 15.15. STRL's Forward P/E has been as high as 12.85 and as low as 9.51, with a median of 11.12, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. STRL has a P/S ratio of 0.49. This compares to its industry's average P/S of 0.7.

Finally, investors should note that STRL has a P/CF ratio of 7.94. 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. STRL's current P/CF looks attractive when compared to its industry's average P/CF of 10.64. Over the past year, STRL's P/CF has been as high as 9.07 and as low as 5.50, with a median of 7.65.

These are only a few of the key metrics included in Sterling Construction'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, STRL looks like an impressive value stock at the moment.

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