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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is Materialise (MTLS). MTLS is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MTLS has a P/S ratio of 1.03. This compares to its industry's average P/S of 2.79.
Finally, investors should note that MTLS has a P/CF ratio of 13.40. 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. MTLS's current P/CF looks attractive when compared to its industry's average P/CF of 16.01. Within the past 12 months, MTLS's P/CF has been as high as 18.25 and as low as 7.37, with a median of 11.88.
Value investors will likely look at more than just these metrics, but the above data helps show that Materialise is likely undervalued currently. And when considering the strength of its earnings outlook, MTLS sticks out as one of the market's strongest value stocks.
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Materialise NV (MTLS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).