Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Maximus (MMS) is a stock many investors are watching right now. MMS is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 11.4 right now. For comparison, its industry sports an average P/E of 13.47. Over the last 12 months, MMS's Forward P/E has been as high as 15.98 and as low as 10.58, with a median of 12.78.
Another valuation metric that we should highlight is MMS's P/B ratio of 2.45. 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. MMS's current P/B looks attractive when compared to its industry's average P/B of 3.34. MMS's P/B has been as high as 3.11 and as low as 2.22, with a median of 2.56, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MMS has a P/S ratio of 0.75. This compares to its industry's average P/S of 0.81.
Finally, we should also recognize that MMS has a P/CF ratio of 9.53. 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 19.71. Within the past 12 months, MMS's P/CF has been as high as 13.25 and as low as 8.67, with a median of 10.45.
These are only a few of the key metrics included in Maximus'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, MMS looks like an impressive 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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