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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is The Hackett Group (HCKT). HCKT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.48. This compares to its industry's average Forward P/E of 23.58. Over the last 12 months, HCKT's Forward P/E has been as high as 17.20 and as low as 10.80, with a median of 13.26.
HCKT is also sporting a PEG ratio of 0.85. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HCKT's industry currently sports an average PEG of 2.33. Over the last 12 months, HCKT's PEG has been as high as 1.11 and as low as 0.74, with a median of 0.87.
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. HCKT has a P/S ratio of 1.71. This compares to its industry's average P/S of 1.75.
Finally, investors will want to recognize that HCKT has a P/CF ratio of 13.13. 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. HCKT's P/CF compares to its industry's average P/CF of 15.11. Within the past 12 months, HCKT's P/CF has been as high as 16.06 and as low as 11.15, with a median of 13.31.
Investors could also keep in mind Huron Consulting Group (HURN), an Consulting Services stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Additionally, Huron Consulting Group has a P/B ratio of 2.77 while its industry's price-to-book ratio sits at 5.86. For HURN, this valuation metric has been as high as 2.99, as low as 1.76, with a median of 2.46 over the past year.
These are only a few of the key metrics included in The Hackett Group and Huron Consulting Group strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, HCKT and HURN look like an impressive value stock at the moment.
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