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Are Investors Undervaluing Donnelley Financial Solutions (DFIN) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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.

One stock to keep an eye on is Donnelley Financial Solutions (DFIN - Free Report) . DFIN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 16.84 right now. For comparison, its industry sports an average P/E of 21.18. Over the past year, DFIN's Forward P/E has been as high as 19.61 and as low as 11.81, with a median of 16.14.

Finally, we should also recognize that DFIN has a P/CF ratio of 12.30. 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 stock's P/CF looks attractive against its industry's average P/CF of 15.60. DFIN's P/CF has been as high as 13 and as low as 7.41, with a median of 10.57, all within the past year.

These are just a handful of the figures considered in Donnelley Financial Solutions's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DFIN is an impressive value stock right now.


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