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.
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
InfuSystems Holdings (INFU) is a stock many investors are watching right now. INFU is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by 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. INFU has a P/S ratio of 1.44. This compares to its industry's average P/S of 1.5.
Finally, we should also recognize that INFU has a P/CF ratio of 11.46. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. INFU's P/CF compares to its industry's average P/CF of 15.03. INFU's P/CF has been as high as 14.94 and as low as 6.13, with a median of 10.60, 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 InfuSystems Holdings is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, INFU feels like a great value stock at the moment.
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InfuSystems Holdings, Inc. (INFU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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