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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
Accel Entertainment (ACEL) is a stock many investors are watching right now. ACEL is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 14.22, which compares to its industry's average of 23.82. ACEL's Forward P/E has been as high as 17.76 and as low as 11.88, with a median of 14.32, all within the past year.
Investors should also recognize that ACEL has a P/B ratio of 3.59. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 9.09. ACEL's P/B has been as high as 4.92 and as low as 3.14, with a median of 3.81, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ACEL has a P/S ratio of 0.79. This compares to its industry's average P/S of 1.26.
Finally, we should also recognize that ACEL has a P/CF ratio of 8.80. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 24.05. Over the past 52 weeks, ACEL's P/CF has been as high as 11.23 and as low as 7.35, with a median of 8.96.
Value investors will likely look at more than just these metrics, but the above data helps show that Accel Entertainment is likely undervalued currently. And when considering the strength of its earnings outlook, ACEL sticks out as one of the market's strongest value stocks.
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Accel Entertainment, Inc. (ACEL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).