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 Green Dot (GDOT). GDOT is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 9.66, while its industry has an average P/E of 20.99. GDOT's Forward P/E has been as high as 10.40 and as low as 4.21, with a median of 7.06, all within the past year.
Finally, we should also recognize that GDOT has a P/CF ratio of 13.87. 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. This stock's P/CF looks attractive against its industry's average P/CF of 15.20. GDOT's P/CF has been as high as 25.01 and as low as 4.91, with a median of 9.65, all within the past year.
These are only a few of the key metrics included in Green Dot's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GDOT looks like an impressive value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Green Dot Corporation (GDOT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
