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.
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.
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 to watch right now is Meta Financial (CASH). CASH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 7.45. This compares to its industry's average Forward P/E of 11.94. CASH's Forward P/E has been as high as 11.68 and as low as 4.33, with a median of 9.22, all within the past year.
Investors should also recognize that CASH has a P/B ratio of 0.79. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1. Over the past 12 months, CASH's P/B has been as high as 1.77 and as low as 0.63, with a median of 1.45.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CASH has a P/S ratio of 1.13. This compares to its industry's average P/S of 1.99.
Finally, we should also recognize that CASH has a P/CF ratio of 3.43. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 10.48. Over the past 52 weeks, CASH's P/CF has been as high as 10.07 and as low as 2.74, with a median of 8.31.
Value investors will likely look at more than just these metrics, but the above data helps show that Meta Financial is likely undervalued currently. And when considering the strength of its earnings outlook, CASH sticks out at as one of the market's strongest value stocks.
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Meta Financial Group, Inc. (CASH) : Free Stock Analysis Report
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