The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company to watch right now is CONMED (CNMD). CNMD is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 10.69, which compares to its industry's average of 18.29. Over the last 12 months, CNMD's Forward P/E has been as high as 16.97 and as low as 10.31, with a median of 13.21.
We also note that CNMD holds a PEG ratio of 1.62. 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. CNMD's PEG compares to its industry's average PEG of 1.85. CNMD's PEG has been as high as 1.92 and as low as 0.68, with a median of 1.32, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CNMD has a P/S ratio of 1.02. This compares to its industry's average P/S of 1.38.
Finally, investors should note that CNMD has a P/CF ratio of 8.23. 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. CNMD's current P/CF looks attractive when compared to its industry's average P/CF of 18.79. Within the past 12 months, CNMD's P/CF has been as high as 13.46 and as low as 7.55, with a median of 9.15.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CONMED is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CNMD feels like a great value stock at the moment.
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CONMED Corporation (CNMD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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