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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 stock to keep an eye on is Rigel Pharmaceuticals (RIGL). RIGL is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RIGL has a P/S ratio of 2.86. This compares to its industry's average P/S of 4.17.
Finally, investors should note that RIGL has a P/CF ratio of 6.34. 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. RIGL's current P/CF looks attractive when compared to its industry's average P/CF of 14.39. RIGL's P/CF has been as high as 96.38 and as low as -21.56, with a median of 10.07, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Rigel Pharmaceuticals is likely undervalued currently. And when considering the strength of its earnings outlook, RIGL sticks out as one of the market's strongest value stocks.
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Rigel Pharmaceuticals, Inc. (RIGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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