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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One stock to keep an eye on is MediaAlpha (MAX). MAX is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 14.35. This compares to its industry's average Forward P/E of 23.86. Over the past 52 weeks, MAX's Forward P/E has been as high as 73.45 and as low as 9.72, with a median of 14.88.
Finally, investors will want to recognize that MAX has a P/CF ratio of 26.25. 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 57.67. Within the past 12 months, MAX's P/CF has been as high as 66.13 and as low as -172.80, with a median of 25.24.
Value investors will likely look at more than just these metrics, but the above data helps show that MediaAlpha is likely undervalued currently. And when considering the strength of its earnings outlook, MAX sticks out as one of the market's strongest value stocks.
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MediaAlpha, Inc. (MAX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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