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Are Investors Undervaluing Resources Connection (RGP) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 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.

Resources Connection (RGP - Free Report) is a stock many investors are watching right now. RGP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

We should also highlight that RGP has a P/B ratio of 1.13. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.40. Within the past 52 weeks, RGP's P/B has been as high as 2.02 and as low as 0.96, with a median of 1.74.

Finally, our model also underscores that RGP has a P/CF ratio of 7.89. 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. RGP's P/CF compares to its industry's average P/CF of 9.38. Over the past 52 weeks, RGP's P/CF has been as high as 15.67 and as low as 6.66, with a median of 12.54.

These are only a few of the key metrics included in Resources Connection'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, RGP looks like an impressive value stock at the moment.


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