Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Primoris Services (PRIM). PRIM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.43, which compares to its industry's average of 16.52. Over the past year, PRIM's Forward P/E has been as high as 22.17 and as low as 12.98, with a median of 17.55.
We should also highlight that PRIM has a P/B ratio of 2.26. 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 stock's P/B looks solid versus its industry's average P/B of 3.49. Over the past 12 months, PRIM's P/B has been as high as 3.39 and as low as 1.81, with a median of 2.36.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PRIM has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.72.
Finally, investors should note that PRIM has a P/CF ratio of 11.75. 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. PRIM's current P/CF looks attractive when compared to its industry's average P/CF of 14.68. PRIM's P/CF has been as high as 17.64 and as low as 9.28, with a median of 12.13, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Primoris Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PRIM feels like a great value stock at the moment.
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Primoris Services Corporation (PRIM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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