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.
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 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 company value investors might notice is Aveanna Healthcare (AVAH). AVAH is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 17.55, while its industry has an average P/E of 18.04. Over the past 52 weeks, AVAH's Forward P/E has been as high as 296.02 and as low as -1,528.95, with a median of 46.39.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. AVAH has a P/S ratio of 0.81. This compares to its industry's average P/S of 1.58.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Aveanna Healthcare is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AVAH feels like a great value stock at the moment.
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Aveanna Healthcare Holdings Inc. (AVAH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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