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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Radiant Logistics (RLGT - Free Report) . RLGT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 12.75 right now. For comparison, its industry sports an average P/E of 13.38. Over the last 12 months, RLGT's Forward P/E has been as high as 16.64 and as low as 8.94, with a median of 11.80.
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. RLGT has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.47.
Finally, investors should note that RLGT has a P/CF ratio of 10.92. 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 11.65. Within the past 12 months, RLGT's P/CF has been as high as 12.04 and as low as 7.14, with a median of 9.92.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Radiant Logistics is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RLGT feels like a great value stock at the moment.