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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 Deluxe (DLX - Free Report) . DLX is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.33. This compares to its industry's average Forward P/E of 9.28. Over the past year, DLX's Forward P/E has been as high as 6.95 and as low as 3.90, with a median of 5.32.
We also note that DLX holds a PEG ratio of 0.44. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DLX's industry has an average PEG of 0.73 right now. Over the past 52 weeks, DLX's PEG has been as high as 0.58 and as low as 0.32, with a median of 0.44.
Another notable valuation metric for DLX is its P/B ratio of 1.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.87. Over the past year, DLX's P/B has been as high as 1.75 and as low as 0.98, with a median of 1.35.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DLX has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.6.
Finally, we should also recognize that DLX has a P/CF ratio of 3.36. 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. DLX's P/CF compares to its industry's average P/CF of 8.07. Over the past 52 weeks, DLX's P/CF has been as high as 3.89 and as low as 2.31, with a median of 2.97.
These are only a few of the key metrics included in Deluxe'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, DLX looks like an impressive value stock at the moment.
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Should Value Investors Buy Deluxe (DLX) Stock?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 Deluxe (DLX - Free Report) . DLX is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.33. This compares to its industry's average Forward P/E of 9.28. Over the past year, DLX's Forward P/E has been as high as 6.95 and as low as 3.90, with a median of 5.32.
We also note that DLX holds a PEG ratio of 0.44. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DLX's industry has an average PEG of 0.73 right now. Over the past 52 weeks, DLX's PEG has been as high as 0.58 and as low as 0.32, with a median of 0.44.
Another notable valuation metric for DLX is its P/B ratio of 1.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.87. Over the past year, DLX's P/B has been as high as 1.75 and as low as 0.98, with a median of 1.35.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DLX has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.6.
Finally, we should also recognize that DLX has a P/CF ratio of 3.36. 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. DLX's P/CF compares to its industry's average P/CF of 8.07. Over the past 52 weeks, DLX's P/CF has been as high as 3.89 and as low as 2.31, with a median of 2.97.
These are only a few of the key metrics included in Deluxe'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, DLX looks like an impressive value stock at the moment.