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.
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.
One stock to keep an eye on is Radiant Logistics (RLGT - Free Report) . RLGT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RLGT has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.36.
Finally, our model also underscores that RLGT has a P/CF ratio of 10.53. 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. RLGT's current P/CF looks attractive when compared to its industry's average P/CF of 10.92. Over the past year, RLGT's P/CF has been as high as 12.04 and as low as 7.14, with a median of 10.17.
These are just a handful of the figures considered in Radiant Logistics'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 RLGT is an impressive value stock right now.