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.
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.
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 company to watch right now is WEX (WEX). WEX is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 9.68, while its industry has an average P/E of 20.19. Over the past year, WEX's Forward P/E has been as high as 12.19 and as low as 7.27, with a median of 10.12.
We also note that WEX holds a PEG ratio of 1.22. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WEX's PEG compares to its industry's average PEG of 1.66. Over the past 52 weeks, WEX's PEG has been as high as 2.61 and as low as 0.78, with a median of 1.29.
We should also highlight that WEX has a P/B ratio of 5.72. 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 8.01. WEX's P/B has been as high as 6.84 and as low as 3.96, with a median of 5.05, over the past year.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. WEX has a P/S ratio of 2.08. This compares to its industry's average P/S of 2.44.
Finally, investors should note that WEX has a P/CF ratio of 8.85. 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. WEX's P/CF compares to its industry's average P/CF of 16.47. Over the past 52 weeks, WEX's P/CF has been as high as 16.12 and as low as 6.99, with a median of 9.69.
These are just a handful of the figures considered in WEX's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that WEX is an impressive value stock right now.
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WEX Inc. (WEX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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