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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Consumer Portfolio Services (CPSS - Free Report) . CPSS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 7.28 right now. For comparison, its industry sports an average P/E of 9.81. Over the last 12 months, CPSS's Forward P/E has been as high as 7.85 and as low as 4.85, with a median of 6.38.
Finally, we should also recognize that CPSS has a P/CF ratio of 3.68. 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. CPSS's P/CF compares to its industry's average P/CF of 8.55. Within the past 12 months, CPSS's P/CF has been as high as 8.76 and as low as 1.79, with a median of 3.67.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Consumer Portfolio Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CPSS feels like a great value stock at the moment.