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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 stock to keep an eye on is Accel Entertainment (ACEL). ACEL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 14.99, which compares to its industry's average of 28.42. ACEL's Forward P/E has been as high as 17.76 and as low as 11.82, with a median of 13.93, all within the past year.
Another notable valuation metric for ACEL is its P/B ratio of 3.88. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. ACEL's current P/B looks attractive when compared to its industry's average P/B of 10.98. ACEL's P/B has been as high as 4.92 and as low as 3.21, with a median of 4.17, over the past year.
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. ACEL has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.16.
Finally, investors will want to recognize that ACEL has a P/CF ratio of 10.42. 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. ACEL's P/CF compares to its industry's average P/CF of 30.54. Over the past year, ACEL's P/CF has been as high as 11.23 and as low as 7.45, with a median of 8.86.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Accel Entertainment is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ACEL feels like a great value stock at the moment.
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Accel Entertainment, Inc. (ACEL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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