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Should Value Investors Buy Escalade (ESCA) 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Escalade (ESCA - Free Report) is a stock many investors are watching right now. ESCA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 14.59, while its industry has an average P/E of 26.17. Over the past year, ESCA's Forward P/E has been as high as 25.23 and as low as 9.66, with a median of 12.76.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ESCA has a P/S ratio of 0.85. This compares to its industry's average P/S of 1.08.

Finally, investors should note that ESCA has a P/CF ratio of 11.18. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 26.50. ESCA's P/CF has been as high as 20.24 and as low as 9.34, with a median of 10.67, all within the past year.

These are just a handful of the figures considered in Escalade'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 ESCA is an impressive value stock right now.


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