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Is Penn National Gaming (PENN) a Great Value Stock Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Penn National Gaming (PENN - Free Report) . PENN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.27. This compares to its industry's average Forward P/E of 18.95. Over the past 52 weeks, PENN's Forward P/E has been as high as 22.36 and as low as 8.51, with a median of 12.93.

We also note that PENN holds a PEG ratio of 1.03. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PENN's PEG compares to its industry's average PEG of 1.66. PENN's PEG has been as high as 2.24 and as low as 0.85, with a median of 1.29, all within the past year.

Another valuation metric that we should highlight is PENN's P/B ratio of 1.27. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.51. Within the past 52 weeks, PENN's P/B has been as high as 109.84 and as low as 1.04, with a median of 3.28.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PENN has a P/S ratio of 0.51. This compares to its industry's average P/S of 1.47.

Finally, we should also recognize that PENN has a P/CF ratio of 5.30. 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. PENN's P/CF compares to its industry's average P/CF of 12.94. PENN's P/CF has been as high as 79.08 and as low as 3.76, with a median of 6.21, all within the past year.

These are just a handful of the figures considered in Penn National Gaming'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 PENN is an impressive value stock right now.


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