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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Maximus (MMS). MMS is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.43. This compares to its industry's average Forward P/E of 14.20. Over the past year, MMS's Forward P/E has been as high as 15.98 and as low as 10.83, with a median of 13.24.
We should also highlight that MMS has a P/B ratio of 2.46. 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 solid versus its industry's average P/B of 3.42. MMS's P/B has been as high as 3.11 and as low as 2.22, with a median of 2.69, over 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. MMS has a P/S ratio of 0.74. This compares to its industry's average P/S of 0.75.
Finally, we should also recognize that MMS has a P/CF ratio of 9.59. 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. MMS's P/CF compares to its industry's average P/CF of 20.21. Over the past year, MMS's P/CF has been as high as 14.59 and as low as 8.67, with a median of 11.28.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Maximus is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MMS feels like a great value stock at the moment.
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Maximus, Inc. (MMS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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