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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Primoris Services (PRIM). PRIM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 12.61 right now. For comparison, its industry sports an average P/E of 16.25. Over the past year, PRIM's Forward P/E has been as high as 22.17 and as low as 11.89, with a median of 17.55.
We should also highlight that PRIM has a P/B ratio of 2.15. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.48. PRIM's P/B has been as high as 3.39 and as low as 1.85, with a median of 2.36, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PRIM has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.77.
Finally, our model also underscores that PRIM has a P/CF ratio of 11.16. 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. PRIM's current P/CF looks attractive when compared to its industry's average P/CF of 14.98. PRIM's P/CF has been as high as 17.64 and as low as 9.48, with a median of 12.13, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Primoris Services is likely undervalued currently. And when considering the strength of its earnings outlook, PRIM sticks out at as one of the market's strongest value stocks.
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Primoris Services Corporation (PRIM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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