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Should Value Investors Buy Deluxe (DLX) Stock?

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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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Deluxe (DLX - Free Report) is a stock many investors are watching right now. DLX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 6.64. This compares to its industry's average Forward P/E of 10.01. Over the last 12 months, DLX's Forward P/E has been as high as 9.57 and as low as 5.69, with a median of 7.83.

Investors should also recognize that DLX has a P/B ratio of 2.13. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. DLX's current P/B looks attractive when compared to its industry's average P/B of 2.94. Over the past 12 months, DLX's P/B has been as high as 2.69 and as low as 1.79, with a median of 2.19.

Finally, we should also recognize that DLX has a P/CF ratio of 7.37. 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. DLX's current P/CF looks attractive when compared to its industry's average P/CF of 10.67. Over the past year, DLX's P/CF has been as high as 7.92 and as low as 5.28, with a median of 6.87.

These are only a few of the key metrics included in Deluxe'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, DLX looks like an impressive value stock at the moment.


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