Back to top

Image: Bigstock

Should Value Investors Buy Quad/Graphics (QUAD) Stock?

Read MoreHide Full Article

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Quad/Graphics (QUAD - Free Report) . QUAD is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.02. This compares to its industry's average Forward P/E of 20.50. Over the past 52 weeks, QUAD's Forward P/E has been as high as 14.80 and as low as 11.02, with a median of 12.32.

Another notable valuation metric for QUAD is its P/B ratio of 2.08. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.91. QUAD's P/B has been as high as 3.07 and as low as 1.71, with a median of 2.34, over the past year.

Finally, investors will want to recognize that QUAD has a P/CF ratio of 3.39. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. QUAD's current P/CF looks attractive when compared to its industry's average P/CF of 9.19. QUAD's P/CF has been as high as 4.71 and as low as 2.96, with a median of 3.56, all within the past year.

These are only a few of the key metrics included in Quad/Graphics'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, QUAD looks like an impressive value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Quad Graphics, Inc (QUAD) - free report >>