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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 company to watch right now is Virco Manufacturing (VIRC). VIRC is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 7.59, which compares to its industry's average of 9.72. Over the last 12 months, VIRC's Forward P/E has been as high as 11.62 and as low as 6.52, with a median of 8.03.
Another valuation metric that we should highlight is VIRC's P/B ratio of 1.23. 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. VIRC's current P/B looks attractive when compared to its industry's average P/B of 1.59. Over the past 12 months, VIRC's P/B has been as high as 3.03 and as low as 1.20, with a median of 1.62.
Finally, investors should note that VIRC has a P/CF ratio of 4.90. 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. This stock's P/CF looks attractive against its industry's average P/CF of 7.12. Within the past 12 months, VIRC's P/CF has been as high as 9.19 and as low as 4.79, with a median of 6.31.
These are just a handful of the figures considered in Virco Manufacturing's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that VIRC is an impressive value stock right now.
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Virco Manufacturing Corporation (VIRC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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