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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Strategic Education (STRA). STRA is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
Investors should also recognize that STRA has a P/B ratio of 1.18. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.10. Over the past 12 months, STRA's P/B has been as high as 1.53 and as low as 1.06, with a median of 1.26.
Finally, investors should note that STRA has a P/CF ratio of 12.00. 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. STRA's current P/CF looks attractive when compared to its industry's average P/CF of 14.26. STRA's P/CF has been as high as 15.87 and as low as 10.81, with a median of 12.87, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Strategic Education is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, STRA feels like a great value stock at the moment.
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Strategic Education Inc. (STRA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).