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Are Investors Undervaluing Sprint (S) 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, 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Sprint (S - Free Report) is a stock many investors are watching right now. S is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

We should also highlight that S has a P/B ratio of 0.86. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. S's current P/B looks attractive when compared to its industry's average P/B of 1.48. Over the past year, S's P/B has been as high as 1.29 and as low as 0.73, with a median of 0.84.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. S has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.28.

Finally, we should also recognize that S has a P/CF ratio of 1.52. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. S's P/CF compares to its industry's average P/CF of 3.82. S's P/CF has been as high as 3.27 and as low as 1.24, with a median of 1.46, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Sprint is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, S feels like a great value stock at the moment.




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