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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 company to watch right now is Unifirst (UNF). UNF is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 19.74. This compares to its industry's average Forward P/E of 19.81. UNF's Forward P/E has been as high as 28.56 and as low as 19.28, with a median of 22.17, all within the past year.
Investors should also recognize that UNF has a P/B ratio of 1.49. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.87. UNF's P/B has been as high as 2.01 and as low as 1.40, with a median of 1.62, over the past year.
Finally, investors should note that UNF has a P/CF ratio of 11.04. 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. UNF's P/CF compares to its industry's average P/CF of 20.46. Over the past year, UNF's P/CF has been as high as 14.90 and as low as 10.32, with a median of 11.94.
Value investors will likely look at more than just these metrics, but the above data helps show that Unifirst is likely undervalued currently. And when considering the strength of its earnings outlook, UNF sticks out as one of the market's strongest value stocks.
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Unifirst Corporation (UNF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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