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.
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 The Interpublic Group of Companies (IPG). IPG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is IPG's P/B ratio of 2.57. 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 stock's P/B looks attractive against its industry's average P/B of 4.61. Over the past year, IPG's P/B has been as high as 3.16 and as low as 2.33, with a median of 2.88.
Finally, investors should note that IPG has a P/CF ratio of 9.13. 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. IPG's P/CF compares to its industry's average P/CF of 10.61. Within the past 12 months, IPG's P/CF has been as high as 9.78 and as low as 7.48, with a median of 8.38.
These figures are just a handful of the metrics value investors tend to look at, but they help show that The Interpublic Group of Companies is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IPG feels like a great value stock at the moment.
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Interpublic Group of Companies, Inc. (The) (IPG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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