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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Hanger (HNGR - Free Report) . HNGR is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. HNGR has a P/S ratio of 0.67. This compares to its industry's average P/S of 0.81.
Finally, investors should note that HNGR has a P/CF ratio of 11.52. 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. This stock's P/CF looks attractive against its industry's average P/CF of 21.38. Over the past 52 weeks, HNGR's P/CF has been as high as 20.94 and as low as -16.55, with a median of 11.33.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Hanger is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HNGR feels like a great value stock at the moment.