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Should Value Investors Buy JD.com (JD) Stock?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is JD.com (JD - Free Report) . JD is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.48, which compares to its industry's average of 25.13. Over the past year, JD's Forward P/E has been as high as 11.39 and as low as 6.57, with a median of 8.65.

Finally, our model also underscores that JD has a P/CF ratio of 7.89. 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 12.83. Over the past 52 weeks, JD's P/CF has been as high as 11.82 and as low as 6.65, with a median of 7.92.

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

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