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Should Value Investors Buy RCM Technologies (RCMT) Stock?
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 to watch right now is RCM Technologies (RCMT - Free Report) . RCMT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.68 right now. For comparison, its industry sports an average P/E of 16.10. Over the past 52 weeks, RCMT's Forward P/E has been as high as 15.75 and as low as 7.03, with a median of 8.29.
Finally, our model also underscores that RCMT has a P/CF ratio of 9.83. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.53. Over the past 52 weeks, RCMT's P/CF has been as high as 14.40 and as low as 7.98, with a median of 9.54.
Value investors will likely look at more than just these metrics, but the above data helps show that RCM Technologies is likely undervalued currently. And when considering the strength of its earnings outlook, RCMT sticks out at as one of the market's strongest value stocks.