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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
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 Eldorado Gold (EGO). EGO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.61, while its industry has an average P/E of 14.26. EGO's Forward P/E has been as high as 18.88 and as low as 7.84, with a median of 11.79, all within the past year.
Investors should also note that EGO holds a PEG ratio of 0.31. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EGO's PEG compares to its industry's average PEG of 0.51. EGO's PEG has been as high as 6.13 and as low as 0.26, with a median of 0.32, all within the past year.
Another notable valuation metric for EGO is its P/B ratio of 0.94. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.99. Over the past year, EGO's P/B has been as high as 1.03 and as low as 0.71, with a median of 0.88.
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. EGO has a P/S ratio of 2.76. This compares to its industry's average P/S of 3.47.
Finally, our model also underscores that EGO has a P/CF ratio of 6.42. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. EGO's current P/CF looks attractive when compared to its industry's average P/CF of 10.84. EGO's P/CF has been as high as 8.96 and as low as 5.08, with a median of 6.30, all within the past year.
These are just a handful of the figures considered in Eldorado Gold's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that EGO is an impressive value stock right now.
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Eldorado Gold Corporation (EGO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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