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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 Oil States International (OIS). OIS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 7.42, which compares to its industry's average of 11.08. Over the past year, OIS's Forward P/E has been as high as 28.91 and as low as 7.03, with a median of 13.79.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. OIS has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.64.
Finally, our model also underscores that OIS has a P/CF ratio of 4.71. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.50. Within the past 12 months, OIS's P/CF has been as high as 9.28 and as low as 3.59, with a median of 6.47.
These are just a handful of the figures considered in Oil States International'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 OIS is an impressive value stock right now.
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Oil States International, Inc. (OIS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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