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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is EZCORP (EZPW). EZPW is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
Another valuation metric that we should highlight is EZPW's P/B ratio of 0.95. The P/B ratio pits a stock's market value against 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 0.98. Within the past 52 weeks, EZPW's P/B has been as high as 0.96 and as low as 0.66, with a median of 0.78.
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. EZPW has a P/S ratio of 0.69. This compares to its industry's average P/S of 1.37.
Value investors will likely look at more than just these metrics, but the above data helps show that EZCORP is likely undervalued currently. And when considering the strength of its earnings outlook, EZPW sticks out at as one of the market's strongest value stocks.
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EZCORP, Inc. (EZPW) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).