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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.
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 stock to keep an eye on is Cars.com (CARS - Free Report) . CARS is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.
Another notable valuation metric for CARS is its P/B ratio of 1.76. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.26. Over the past 12 months, CARS's P/B has been as high as 2.64 and as low as 1.30, with a median of 1.74.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CARS has a P/S ratio of 0.72. This compares to its industry's average P/S of 1.06.
Finally, we should also recognize that CARS has a P/CF ratio of 5.80. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.95. Within the past 12 months, CARS's P/CF has been as high as 9.20 and as low as 4.20, with a median of 5.76.
Value investors will likely look at more than just these metrics, but the above data helps show that Cars.com is likely undervalued currently. And when considering the strength of its earnings outlook, CARS sticks out as one of the market's strongest value stocks.
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Is Cars.com (CARS) a Great Value Stock Right Now?
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.
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 stock to keep an eye on is Cars.com (CARS - Free Report) . CARS is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.
Another notable valuation metric for CARS is its P/B ratio of 1.76. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.26. Over the past 12 months, CARS's P/B has been as high as 2.64 and as low as 1.30, with a median of 1.74.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CARS has a P/S ratio of 0.72. This compares to its industry's average P/S of 1.06.
Finally, we should also recognize that CARS has a P/CF ratio of 5.80. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.95. Within the past 12 months, CARS's P/CF has been as high as 9.20 and as low as 4.20, with a median of 5.76.
Value investors will likely look at more than just these metrics, but the above data helps show that Cars.com is likely undervalued currently. And when considering the strength of its earnings outlook, CARS sticks out as one of the market's strongest value stocks.