While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
WEX (WEX) is a stock many investors are watching right now. WEX is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.68, while its industry has an average P/E of 16.81. Over the past 52 weeks, WEX's Forward P/E has been as high as 12.19 and as low as 7.27, with a median of 10.12.
Another valuation metric that we should highlight is WEX's P/B ratio of 5.72. 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 company's current P/B looks solid when compared to its industry's average P/B of 6.88. Within the past 52 weeks, WEX's P/B has been as high as 6.84 and as low as 3.96, with a median of 5.05.
Finally, our model also underscores that WEX has a P/CF ratio of 8.85. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.21. WEX's P/CF has been as high as 16.12 and as low as 6.99, with a median of 9.69, 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 WEX is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, WEX feels like a great value stock at the moment.
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WEX Inc. (WEX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).