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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is BuildABear Workshop (BBW). BBW is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.34, which compares to its industry's average of 19.13. BBW's Forward P/E has been as high as 13.86 and as low as 7.24, with a median of 10.09, all within the past year.
Investors should also recognize that BBW has a P/B ratio of 4.89. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. BBW's current P/B looks attractive when compared to its industry's average P/B of 13.78. Within the past 52 weeks, BBW's P/B has been as high as 5.08 and as low as 3.04, with a median of 3.95.
Finally, we should also recognize that BBW has a P/CF ratio of 10.26. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 21.20. Over the past year, BBW's P/CF has been as high as 10.66 and as low as 5.86, with a median of 7.80.
These are only a few of the key metrics included in BuildABear Workshop'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, BBW looks like an impressive value stock at the moment.
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Build-A-Bear Workshop, Inc. (BBW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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