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.
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 Maximus (MMS). MMS is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is MMS's P/B ratio of 2.83. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. MMS's current P/B looks attractive when compared to its industry's average P/B of 2.95. Within the past 52 weeks, MMS's P/B has been as high as 3.10 and as low as 2.22, with a median of 2.42.
Finally, investors will want to recognize that MMS has a P/CF ratio of 11.31. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.99. Within the past 12 months, MMS's P/CF has been as high as 13.19 and as low as 8.67, with a median of 9.99.
Value investors will likely look at more than just these metrics, but the above data helps show that Maximus is likely undervalued currently. And when considering the strength of its earnings outlook, MMS sticks out as one of the market's strongest value stocks.
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
Maximus, Inc. (MMS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
