Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 El Pollo Loco (LOCO). LOCO is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 10.8. This compares to its industry's average Forward P/E of 23.09. Over the last 12 months, LOCO's Forward P/E has been as high as 15.97 and as low as 9.83, with a median of 12.16.
Finally, our model also underscores that LOCO has a P/CF ratio of 7.12. 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. LOCO's P/CF compares to its industry's average P/CF of 21.09. LOCO's P/CF has been as high as 10.11 and as low as 6.32, with a median of 7.83, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that El Pollo Loco is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LOCO feels like a great value stock at the moment.
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El Pollo Loco Holdings, Inc. (LOCO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).