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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Enova International (ENVA). ENVA is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.3, which compares to its industry's average of 9.30. Over the last 12 months, ENVA's Forward P/E has been as high as 10.85 and as low as 7.10, with a median of 8.63.
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. ENVA has a P/S ratio of 1. This compares to its industry's average P/S of 1.31.
Finally, investors should note that ENVA has a P/CF ratio of 10.71. 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. ENVA's current P/CF looks attractive when compared to its industry's average P/CF of 27.13. ENVA's P/CF has been as high as 12.59 and as low as 8.04, with a median of 9.98, 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 Enova International is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ENVA feels like a great value stock at the moment.
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Enova International, Inc. (ENVA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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