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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Travelzoo (TZOO) is a stock many investors are watching right now. TZOO is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.9. This compares to its industry's average Forward P/E of 26.08. Over the past 52 weeks, TZOO's Forward P/E has been as high as 19.08 and as low as 8.24, with a median of 10.90.
Finally, our model also underscores that TZOO has a P/CF ratio of 12.81. 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. TZOO's current P/CF looks attractive when compared to its industry's average P/CF of 15.37. Within the past 12 months, TZOO's P/CF has been as high as 20.36 and as low as 7.45, with a median of 12.46.
These are only a few of the key metrics included in Travelzoo'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, TZOO looks like an impressive value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Travelzoo (TZOO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
