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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 American Outdoor Brands . AOBC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AOBC has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.29.
Finally, our model also underscores that AOBC has a P/CF ratio of 7.33. 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. This stock's P/CF looks attractive against its industry's average P/CF of 28.66. Within the past 12 months, AOBC's P/CF has been as high as 9.12 and as low as 4.14, with a median of 6.36.
These figures are just a handful of the metrics value investors tend to look at, but they help show that American Outdoor Brands is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AOBC feels like a great value stock at the moment.