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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is DHI Group (DHX). DHX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.65, while its industry has an average P/E of 25.52. DHX's Forward P/E has been as high as 28.42 and as low as 8.99, with a median of 11.80, all within the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DHX has a P/S ratio of 0.74. This compares to its industry's average P/S of 1.17.
These figures are just a handful of the metrics value investors tend to look at, but they help show that DHI Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DHX feels like a great value stock at the moment.
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DHI Group, Inc. (DHX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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