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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Meet Group (MEET - Free Report) . MEET is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
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. MEET has a P/S ratio of 1.43. This compares to its industry's average P/S of 3.99.
Finally, investors should note that MEET has a P/CF ratio of 14.87. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 55.31. MEET's P/CF has been as high as 31.11 and as low as -7.72, with a median of -5.28, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Meet Group is likely undervalued currently. And when considering the strength of its earnings outlook, MEET sticks out at as one of the market's strongest value stocks.