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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
Virtu Financial (VIRT) is a stock many investors are watching right now. VIRT is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.38 right now. For comparison, its industry sports an average P/E of 20.55. Over the last 12 months, VIRT's Forward P/E has been as high as 12.61 and as low as 8.89, with a median of 10.63.
Investors should also note that VIRT holds a PEG ratio of 0.54. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. VIRT's PEG compares to its industry's average PEG of 1.13. Within the past year, VIRT's PEG has been as high as 1.53 and as low as 0.39, with a median of 0.55.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VIRT has a P/S ratio of 1.86. This compares to its industry's average P/S of 2.08.
Finally, we should also recognize that VIRT has a P/CF ratio of 6.77. 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 20.26. Over the past 52 weeks, VIRT's P/CF has been as high as 9.71 and as low as 6.10, with a median of 7.69.
These are just a handful of the figures considered in Virtu Financial's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that VIRT is an impressive value stock right now.
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Virtu Financial, Inc. (VIRT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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