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Is StarTek (SRT) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

StarTek is a stock many investors are watching right now. SRT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 14.54, which compares to its industry's average of 24.92. SRT's Forward P/E has been as high as 87.65 and as low as -38.97, with a median of 42.09, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SRT has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.63.

Finally, our model also underscores that SRT has a P/CF ratio of 8.09. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.17. SRT's P/CF has been as high as 120.98 and as low as -130.32, with a median of 14.53, all within the past year.

These are only a few of the key metrics included in StarTek's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SRT looks like an impressive value stock at the moment.

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