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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
One stock to keep an eye on is Bridgepoint Education (BPI - Free Report) . BPI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 15.34, which compares to its industry's average of 25.22. Over the past 52 weeks, BPI's Forward P/E has been as high as 42 and as low as 12.49, with a median of 17.93.
Investors will also notice that BPI has a PEG ratio of 1.53. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BPI's industry has an average PEG of 1.59 right now. Within the past year, BPI's PEG has been as high as 4.20 and as low as 1.25, with a median of 1.79.
Another notable valuation metric for BPI is its P/B ratio of 1.87. Investors use the P/B ratio to look at a stock's market value versus 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 5.25. BPI's P/B has been as high as 2.51 and as low as 1.16, with a median of 1.69, over the past year.
Finally, we should also recognize that BPI has a P/CF ratio of 12.66. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 27.19. BPI's P/CF has been as high as 24.08 and as low as 8.14, with a median of 14.92, all within the past year.
These are just a handful of the figures considered in Bridgepoint Education's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BPI is an impressive value stock right now.