The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Tactile Systems Technology (TCMD). TCMD is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 17.48. This compares to its industry's average Forward P/E of 28.33. Over the past 52 weeks, TCMD's Forward P/E has been as high as 26.13 and as low as 13.41, with a median of 18.82.
We should also highlight that TCMD has a P/B ratio of 1.6. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.76. TCMD's P/B has been as high as 2.23 and as low as 1.08, with a median of 1.59, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. TCMD has a P/S ratio of 1. This compares to its industry's average P/S of 2.7.
Finally, investors should note that TCMD has a P/CF ratio of 14.21. 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. TCMD's current P/CF looks attractive when compared to its industry's average P/CF of 21.05. TCMD's P/CF has been as high as 21.40 and as low as 7.97, with a median of 14.11, all within the past year.
These are only a few of the key metrics included in Tactile Systems Technology'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, TCMD looks like an impressive value stock at the moment.
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Tactile Systems Technology, Inc. (TCMD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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