Back to top

Image: Bigstock

Are Investors Undervaluing Resources Connection (RGP) Right Now?

Read MoreHide Full Article

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 stock to keep an eye on is Resources Connection (RGP - Free Report) . RGP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors should also recognize that RGP has a P/B ratio of 1.33. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.40. Over the past year, RGP's P/B has been as high as 2.02 and as low as 0.96, with a median of 1.66.

Finally, investors should note that RGP has a P/CF ratio of 9.29. 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. RGP's P/CF compares to its industry's average P/CF of 9.38. RGP's P/CF has been as high as 14.44 and as low as 6.69, with a median of 12.17, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Resources Connection is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RGP feels like a great value stock at the moment.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Resources Connection, Inc. (RGP) - free report >>

Published in