Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
El Pollo Loco (LOCO) is a stock many investors are watching right now. LOCO is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.8 right now. For comparison, its industry sports an average P/E of 21.33. LOCO's Forward P/E has been as high as 15.97 and as low as 9.83, with a median of 12.16, all within the past year.
Finally, we should also recognize that LOCO has a P/CF ratio of 7.12. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.51. Over the past year, LOCO's P/CF has been as high as 10.11 and as low as 6.32, with a median of 7.83.
These are just a handful of the figures considered in El Pollo Loco'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 LOCO is an impressive value stock right now.
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El Pollo Loco Holdings, Inc. (LOCO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).