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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Franklin Covey (FC) is a stock many investors are watching right now. FC is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
Investors will also notice that FC has a PEG ratio of 1.23. 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. FC's PEG compares to its industry's average PEG of 1.52. Over the last 12 months, FC's PEG has been as high as 2.95 and as low as 0.82, with a median of 1.26.
Another notable valuation metric for FC is its P/B ratio of 3.81. Investors use the P/B ratio to look at a stock's market value versus 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 4.74. Within the past 52 weeks, FC's P/B has been as high as 6.94 and as low as 3.56, with a median of 5.19.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by 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. FC has a P/S ratio of 0.53. This compares to its industry's average P/S of 1.35.
Finally, our model also underscores that FC has a P/CF ratio of 10.82. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.95. Over the past 52 weeks, FC's P/CF has been as high as 16.63 and as low as 8.45, with a median of 12.76.
Value investors will likely look at more than just these metrics, but the above data helps show that Franklin Covey is likely undervalued currently. And when considering the strength of its earnings outlook, FC sticks out as one of the market's strongest value stocks.
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Franklin Covey Company (FC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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