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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Maximus (MMS) is a stock many investors are watching right now. MMS is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.72, which compares to its industry's average of 12.79. Over the past 52 weeks, MMS's Forward P/E has been as high as 15.98 and as low as 10.58, with a median of 12.26.
Investors should also recognize that MMS has a P/B ratio of 2.53. 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 attractive against its industry's average P/B of 3.29. Over the past 12 months, MMS's P/B has been as high as 3.10 and as low as 2.22, with a median of 2.46.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MMS has a P/S ratio of 0.81. This compares to its industry's average P/S of 0.86.
Finally, investors will want to recognize that MMS has a P/CF ratio of 9.90. 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. This stock's P/CF looks attractive against its industry's average P/CF of 19.38. Over the past 52 weeks, MMS's P/CF has been as high as 13.19 and as low as 8.67, with a median of 10.06.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Maximus is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MMS feels like a great value stock at the moment.
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Maximus, Inc. (MMS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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