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Should Value Investors Buy Hanger (HNGR) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Hanger is a stock many investors are watching right now. HNGR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

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 0.72. This compares to its industry's average P/S of 1.03.

Finally, investors will want to recognize that HNGR has a P/CF ratio of 11.23. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 21.13. HNGR's P/CF has been as high as 20.94 and as low as -15.82, with a median of 11.33, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Hanger is likely undervalued currently. And when considering the strength of its earnings outlook, HNGR sticks out at as one of the market's strongest value stocks.

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