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Should Value Investors Buy DHI Group (DHX) Stock?

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

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.

DHI Group (DHX - Free Report) is a stock many investors are watching right now. DHX is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 12.3, which compares to its industry's average of 21.81. DHX's Forward P/E has been as high as 28.42 and as low as 8.99, with a median of 14.14, all within the past year.

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. DHX has a P/S ratio of 1.06. This compares to its industry's average P/S of 1.29.

These are only a few of the key metrics included in DHI Group'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, DHX looks like an impressive value stock at the moment.


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