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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 value investors might notice is FactSet Research Systems (FDS). FDS is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 15.56. This compares to its industry's average Forward P/E of 17.72. Over the last 12 months, FDS's Forward P/E has been as high as 28.30 and as low as 15.56, with a median of 25.38.
Finally, we should also recognize that FDS has a P/CF ratio of 14.04. 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 stock's P/CF looks attractive against its industry's average P/CF of 19.47. Over the past 52 weeks, FDS's P/CF has been as high as 27.56 and as low as 14.04, with a median of 24.72.
Value investors will likely look at more than just these metrics, but the above data helps show that FactSet Research Systems is likely undervalued currently. And when considering the strength of its earnings outlook, FDS sticks out as one of the market's strongest value stocks.
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FactSet Research Systems Inc. (FDS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).