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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Churchill Downs (CHDN). CHDN is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.21, which compares to its industry's average of 24.43. Over the past 52 weeks, CHDN's Forward P/E has been as high as 22.77 and as low as 12.94, with a median of 16.51.
Investors should also recognize that CHDN has a P/B ratio of 6.42. 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 9.06. Within the past 52 weeks, CHDN's P/B has been as high as 10.03 and as low as 5.93, with a median of 7.60.
Finally, we should also recognize that CHDN has a P/CF ratio of 10.49. 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. CHDN's P/CF compares to its industry's average P/CF of 25.37. Over the past year, CHDN's P/CF has been as high as 18 and as low as 10.22, with a median of 13.14.
Value investors will likely look at more than just these metrics, but the above data helps show that Churchill Downs is likely undervalued currently. And when considering the strength of its earnings outlook, CHDN sticks out as one of the market's strongest value stocks.
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Churchill Downs, Incorporated (CHDN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).