Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 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.
One company to watch right now is Donnelley Financial Solutions (DFIN). DFIN is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 17.45, while its industry has an average P/E of 19.54. Over the last 12 months, DFIN's Forward P/E has been as high as 18.33 and as low as 13.56, with a median of 16.54.
Finally, investors will want to recognize that DFIN has a P/CF ratio of 9.90. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.81. Within the past 12 months, DFIN's P/CF has been as high as 12.80 and as low as 7.09, with a median of 10.59.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Donnelley Financial Solutions is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DFIN feels like a great value stock at the moment.
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