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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Prog Holdings (PRG) is a stock many investors are watching right now. PRG is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 10.12, while its industry has an average P/E of 10.70. Over the last 12 months, PRG's Forward P/E has been as high as 13.68 and as low as 6.82, with a median of 9.79.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PRG has a P/S ratio of 0.56. This compares to its industry's average P/S of 1.65.
Value investors will likely look at more than just these metrics, but the above data helps show that Prog Holdings is likely undervalued currently. And when considering the strength of its earnings outlook, PRG sticks out as one of the market's strongest value stocks.
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Aaron's Holdings Company, Inc. (PRG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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