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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 to watch right now is Bragg Gaming Group Inc. (BRAG). BRAG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
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. BRAG has a P/S ratio of 1.05. This compares to its industry's average P/S of 1.31.
Finally, investors will want to recognize that BRAG has a P/CF ratio of 10.02. 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 28.45. BRAG's P/CF has been as high as 19.01 and as low as 6.55, with a median of 13.71, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Bragg Gaming Group Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, BRAG sticks out at as one of the market's strongest value stocks.
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This article originally published on Zacks Investment Research (zacks.com).
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