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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
One company to watch right now is Genesco (GCO). GCO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 13.67, which compares to its industry's average of 18.05. GCO's Forward P/E has been as high as 42.65 and as low as 8.43, with a median of 20.65, all within the past year.
Finally, we should also recognize that GCO has a P/CF ratio of 7.48. 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 14.38. GCO's P/CF has been as high as 17.26 and as low as 4.45, with a median of 6.47, all within the past year.
These are only a few of the key metrics included in Genesco'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, GCO looks like an impressive value stock at the moment.
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Genesco Inc. (GCO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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