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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Meta Financial (CASH - Free Report) . CASH 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 8.79, which compares to its industry's average of 11.16. Over the past 52 weeks, CASH's Forward P/E has been as high as 13.39 and as low as 6.58, with a median of 8.85.
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. CASH has a P/S ratio of 2.34. This compares to its industry's average P/S of 2.87.
Finally, investors will want to recognize that CASH has a P/CF ratio of 9.71. 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. CASH's current P/CF looks attractive when compared to its industry's average P/CF of 9.75. Within the past 12 months, CASH's P/CF has been as high as 11.61 and as low as 6.84, with a median of 9.17.
These are only a few of the key metrics included in Meta Financial's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CASH looks like an impressive value stock at the moment.