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, 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.
One company value investors might notice is Churchill Downs (CHDN). CHDN is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 14.21, while its industry has an average P/E of 22.46. Over the past year, CHDN's Forward P/E has been as high as 22.77 and as low as 12.94, with a median of 16.51.
Another notable valuation metric for CHDN is its P/B ratio of 6.42. 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 8.68. Over the past 12 months, CHDN's P/B has been as high as 10.03 and as low as 5.93, with a median of 7.60.
Finally, investors should note that CHDN has a P/CF ratio of 10.49. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 23.81. Within the past 12 months, CHDN's P/CF has been as high as 18 and as low as 10.22, with a median of 13.14.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Churchill Downs is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CHDN feels like a great value stock at the moment.
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Churchill Downs, Incorporated (CHDN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).