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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is Perdoceo Education (PRDO). PRDO is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
Another valuation metric that we should highlight is PRDO's P/B ratio of 2.3. 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 company's current P/B looks solid when compared to its industry's average P/B of 3.60. Over the past year, PRDO's P/B has been as high as 2.35 and as low as 1.45, with a median of 1.90.
Finally, we should also recognize that PRDO has a P/CF ratio of 12.58. 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 29.88. PRDO's P/CF has been as high as 13.01 and as low as 9.25, with a median of 11.47, all within the past year.
These are just a handful of the figures considered in Perdoceo Education'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 PRDO is an impressive value stock right now.
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Perdoceo Education Corporation (PRDO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).