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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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 PlayAGS (AGS). AGS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 14.74. This compares to its industry's average Forward P/E of 29.14. AGS's Forward P/E has been as high as 60.33 and as low as 14.68, with a median of 16.89, all within the past year.
Investors should also recognize that AGS has a P/B ratio of 4.41. 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 solid versus its industry's average P/B of 9.67. Within the past 52 weeks, AGS's P/B has been as high as 6.65 and as low as 4.19, with a median of 6.41.
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. AGS has a P/S ratio of 1.27. This compares to its industry's average P/S of 1.28.
These figures are just a handful of the metrics value investors tend to look at, but they help show that PlayAGS is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AGS feels like a great value stock at the moment.
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PlayAGS, Inc. (AGS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).