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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 to watch right now is Maximus (MMS). MMS is currently sporting a Zacks Rank #2 (Buy) and an A for Value.
Another notable valuation metric for MMS is its P/B ratio of 2.83. The P/B is a method of comparing a stock's market value to 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 2.84. Within the past 52 weeks, MMS's P/B has been as high as 3.10 and as low as 2.22, with a median of 2.42.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MMS has a P/S ratio of 0.57. This compares to its industry's average P/S of 0.76.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Maximus is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MMS feels like a great value stock at the moment.
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Maximus, Inc. (MMS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).