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 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.
Accel Entertainment (ACEL) is a stock many investors are watching right now. ACEL is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 14.22 right now. For comparison, its industry sports an average P/E of 22.57. Over the past year, ACEL's Forward P/E has been as high as 17.76 and as low as 11.88, with a median of 14.32.
Another notable valuation metric for ACEL is its P/B ratio of 3.59. 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 stock's P/B looks solid versus its industry's average P/B of 8.70. 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. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ACEL has a P/S ratio of 0.69. This compares to its industry's average P/S of 1.38.
Finally, our model also underscores that ACEL has a P/CF ratio of 8.80. 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. ACEL's current P/CF looks attractive when compared to its industry's average P/CF of 23.85. Within the past 12 months, 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).