Are Investors Undervaluing The Hackett Group (HCKT) Right Now?

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is The Hackett Group (HCKT). HCKT is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.12, while its industry has an average P/E of 16.53. Over the past 52 weeks, HCKT's Forward P/E has been as high as 19.00 and as low as 11.54, with a median of 15.14.

We also note that HCKT holds a PEG ratio of 1.10. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HCKT's PEG compares to its industry's average PEG of 1.59. Within the past year, HCKT's PEG has been as high as 1.36 and as low as 0.91, with a median of 1.14.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HCKT has a P/S ratio of 1.21. This compares to its industry's average P/S of 1.35.

These figures are just a handful of the metrics value investors tend to look at, but they help show that The Hackett Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HCKT feels like a great value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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