Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Brinker International (EAT). EAT is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.04. This compares to its industry's average Forward P/E of 23.91. Over the past year, EAT's Forward P/E has been as high as 28.31 and as low as 13.04, with a median of 17.42.
Investors should also note that EAT holds a PEG ratio of 0.85. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EAT's PEG compares to its industry's average PEG of 1.97. Over the past 52 weeks, EAT's PEG has been as high as 1.72 and as low as 0.35, with a median of 0.52.
Finally, investors should note that EAT has a P/CF ratio of 10.75. 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. EAT's current P/CF looks attractive when compared to its industry's average P/CF of 23.25. Over the past 52 weeks, EAT's P/CF has been as high as 19.36 and as low as 9.71, with a median of 13.93.
Value investors will likely look at more than just these metrics, but the above data helps show that Brinker International is likely undervalued currently. And when considering the strength of its earnings outlook, EAT sticks out as one of the market's strongest value stocks.
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Brinker International, Inc. (EAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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