Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Deluxe (DLX) is a stock many investors are watching right now. DLX is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 5.32, while its industry has an average P/E of 7.62. Over the past 52 weeks, DLX's Forward P/E has been as high as 6.95 and as low as 3.90, with a median of 5.28.
Investors should also note that DLX holds a PEG ratio of 0.44. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. DLX's industry currently sports an average PEG of 0.48. Over the past 52 weeks, DLX's PEG has been as high as 0.58 and as low as 0.32, with a median of 0.44.
Another notable valuation metric for DLX is its P/B ratio of 1.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.63. Over the past 12 months, DLX's P/B has been as high as 1.75 and as low as 0.98, with a median of 1.34.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DLX has a P/S ratio of 0.59. This compares to its industry's average P/S of 0.75.
Finally, we should also recognize that DLX has a P/CF ratio of 3.37. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. DLX's P/CF compares to its industry's average P/CF of 5.19. DLX's P/CF has been as high as 3.89 and as low as 2.31, with a median of 2.97, all within the past year.
These are only a few of the key metrics included in Deluxe'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, DLX looks like an impressive value stock at the moment.
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Deluxe Corporation (DLX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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