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Is CGI Group (GIB) Stock Undervalued 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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 company value investors might notice is CGI Group (GIB - Free Report) . GIB is currently sporting a Zacks Rank #2 (Buy) and an A for Value.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GIB has a P/S ratio of 1.37. This compares to its industry's average P/S of 1.45.

Finally, investors should note that GIB has a P/CF ratio of 12.56. 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 stock's P/CF looks attractive against its industry's average P/CF of 12.70. Over the past year, GIB's P/CF has been as high as 16.75 and as low as 12.52, with a median of 14.87.

Value investors will likely look at more than just these metrics, but the above data helps show that CGI Group is likely undervalued currently. And when considering the strength of its earnings outlook, GIB sticks out as one of the market's strongest value stocks.

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