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, 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 company value investors might notice is Kforce (KFRC). KFRC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 13.58. This compares to its industry's average Forward P/E of 13.71. Over the past year, KFRC's Forward P/E has been as high as 21.76 and as low as 13.37, with a median of 17.72.
Finally, we should also recognize that KFRC has a P/CF ratio of 10.73. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 19.11. Within the past 12 months, KFRC's P/CF has been as high as 21.09 and as low as 10.55, with a median of 16.22.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Kforce is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KFRC feels like a great value stock at the moment.
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Kforce, Inc. (KFRC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).